Читать книгу The IP Box Regime. A Study from an International and European Perspective - Elizabeth Gil García - Страница 6

It is commonly held that research, development and innovation (R&D&I) may play an important role in economic development. Even the socioeconomic and political dimension, the academia contributions to that issue have not been generally made from a juridical, but economic, perspective.

It is generally understood that market incentives alone are not enough to produce an adequate supply of R&D&I and if there is not an opportunity for profit, R&D&I will not be undertaken by firms. As a result, it is essential state intervention in order to stimulate private R&D&I spending –through subsidies, taxes, trade or other policies– and influence the generation of research and knowledge for a sustainable economic growth. Precisely this serves also as a justification because “there is a broad agreement that without such intervention undertakings will tend to underinvest” in R&D&I.1

The Organization for Economic Co-operation and Development (OECD) considers R&D&I key to productivity and growth perfromance,2 and the Europe 2020 strategy puts R&D&I at its heart with the objective of achieving an overall R&D&I spending of 3% of the Gross Domestic Product (GDP).3

Intellectual Property (IP) box regimes were introduced with the purpose to foster innovation by granting a tax benefit to those that assign certain intangibles for their exploitation and further development. Indeed, when talking about R&D&I, two phases or moments can be distinguished. On the one hand, the R&D&I as an activity (input) and, on the other hand, the R&D&I as a result (output). Precisely, it is the second stage, i.e. when the R&D&I process has ended and a result might be generated, that the IP box regime as the prima facie example of output incentives applies. Hence, input incentives support the creation of R&D&I intangibles, while output incentives encourage the further development and exploitation of IP assets.

Therefore, the IP box regime may be regarded as a tool to promote the transfer of knowledge from the tax system. The fact that companies receive a tax benefit if they transfer intangibles (either through alienation or through a licence contract), it will have an incentive effect to do so.

Beyond the innovative effect pursued by the introduction of IP box regimes, this output incentive has been debatable since the very beginning for being a source of tax avoidance and tax planning. In fact, the European Commission sees the IP box regime as an indicator of aggressive tax planning (ATP). Moreover, the OECD has identified it as a ‘hot issue’ in the frame of its Action Plan on Base Erosion and Profit Shifting (BEPS), being BEPS Action 5 a turning point for such regimes.

As a result of the Final Report of BEPS Action 5, an agreement on the implementation of the (modified) nexus approach has arisen for the survival of the so-called ‘patent box regime’. Accordingly, the risk of the BEPS effects is dissipated in the case of an IP box based on the nexus approach. The author’s hypothesis is that the nexus approach acts as a special anti-avoidance rule. Thus, even if the nexus approach ensures that the tax benefit is granted to intangibles arising from genuine R&D&I activities, this does not mean that IP box regimes are a good tax practice nor a tax planning source.

Once the Final Report of BEPS Action 5 was published in October 2015, jurisdictions started to implement the nexus approach to ensure the survival of their IP box regimes. However, a grandfathering clause was granted until the 30 June 2021 to those undertakings benefiting from pre-existing IP regimes. Consequently, an ‘expiry date’ has been established for the pre-BEPS regimes. After 30 June 2021, no more benefits stemming from the respective old regimes may be made available to taxpayers.

It seems the survival of IP box regimes is assured provided that they are based on the nexus approach, however other anti-BEPS measures such as the recommendations related to CFC rules included in the BEPS Action 3 or the proposal to introduce a subject-to-tax clause in tax treaties (BEPS Action 6) turns its future more unclear. Moreover, in recent times, the OECD work on Pillar Two calls the continued existence of IP box regimes into question. Now, that the final countdown for non-complaint IP regimes is closer and only IP-nexus approach regimes can survive, nothing seems sure for IP box regimes. Is this a never-ending story?

The work is organised in six chapters. The first chapter delimits the concept of R&D and innovation, by studying the definitions included in the OECD Manuals and by a reference to the tax legislation of different jurisdictions. Chapter 2 focuses on R&D&I as a result and, in particular, to the knowledge transfer, by providing with a concept and with a mention to different forms of collaboration. This chapter ends with the introduction of the topic of IP box regimes. Chapter 3 analyses the different options for publicly funding R&D&I, i.e. direct subsidies and tax incentives. The author then focuses on tax incentives and explores the classification of R&D&I tax incentives and the limits for its introduction. As mentioned, IP box regimes may create BEPS effects, so Chapter 4 focuses on the introduction of anti-BEPS measures to counreact such effects and how IP box regimes interact with them. Chapter 5 analyses the compatibility of IP box regimes with EU Law. Indeed, Member States are not fully free in the implementation of tax incentives as the prohibition of State aids applies and fundamental freedoms need to be respected. This chapter ends with a reference to the EU strategy on harmful tax practices. With the aim to determine how IP box regimes can be a good tax practice, Chapter 6 provides with an overall overview of the relevant elements in the design of IP box regimes. For such purpose, the author has explored IP regimes among the European Union countries.

1. R.J. Danon, “Tax Incentives on Research and Development (R&D). General Report”, Cahiers de Droit Fiscal International, Vol. 100a, Sdu Uitgevers, The Hague, The Netherlands, 2015, p. 19. Also in C. Brokelind and Å. Hansson, “Tax Incentives, Tax Expenditures Theories in R&D: The Case of Sweden”, World Tax Journal, Vol. 6, No. 2, 2014, p. 175.

2. OECD (2013), Supporting Investment in Knowledge Capital, Growth and Innovation, OECD Publishing, Paris.

3. COM (2010) 2020, Europe 2020 – A strategy for smart, sustainable and inclusive growth, Brussels, March 2010. In the framework of the Barcelona European Council (2002), it was already decided that investments in R&D should increase from 1,9% till 3% of EU GDP for 2010 and two-thirds of the total should be funded by the private sector [COM (2002) 499 final, More research for Europe. Towards 3% of GDP. Brussels, 11 September 2002].