Patent Box


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Intellectual property (IP) box regime provides a reduced effective corporate income tax rate for income derived from qualifying IP. For example, for the fiscal year 2018, the corporate income tax rate in the United-Kingdom is 19% when the IP tax rate is 10%. IP box regime is the European countries' model for IP tax incentives, but this regime is now implemented in non-European countries such as China, India and even in Quebec. This poster addresses the reasons why countries adopt this regime within their borders and the drawbacks. It will then addresses the answer to those drawbacks with the OECD’s Base Erosion and Profit Shifting (BEPS) Project. The 40 pages Action Plan, contained 15 separate action points which focused on addressing the issue of international tax avoidance techniques of high-profile multinationals. The OECD’s BEPS Project addresses the IP Box regime’s issue because some Multinational companies have been using this regime to shift IP profits from the location in which the value was actually created to another location where they will be taxed at a lower rate. In view of all the information gathered, the question is now: Should America adopt an IP Box regime.