The Effect of Intellectual Property Boxes on Innovative Activity &amp; Effective Tax Rates

Bornemann, Tobias; Oßwald, Benjamin

doi:10.2139/ssrn.3115977

Cited by 17 publications

(39 citation statements)

References 52 publications

(88 reference statements)

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“…On the other hand, Bornemann et al (2018) show that not only patent activity is higher in Belgium after the application of the IP box, but also the effective tax rates of Belgian companies have decreased. This reduction is connected with companies which do not use profit shifting activities.…”

Section: Theoretical Backgroundmentioning

confidence: 96%

“…From the perspective of different types of intangible assets, Dudar & Voget (2016) show that the relocation of trademarks are based on tax planning to an even greater degree than such activity connected with patents. Other studies focus on a particular IP box within a certain country; Chatagny et al (2015) in Switzerland, Mohnen et al (2016) in the Netherlands as well as Bornemann et al (2018) in Belgium. Chatagny et al (2015) deal with the effects of the IP license box, which was part of Swiss tax reform.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

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Tax Competition and IP Boxes after the Appliction of the Modified Nexus Approach

Jedlička¹

2018

JOC

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This article deals with intellectual property (IP) boxes as an important factor in tax competition and tax planning. IP payments are used for profit shifting within a group of companies to lower their tax burden. One of the latest important developments in the use of IP boxes is the changing attitude of the OECD and its nexus approach, the application of which influences taxation within an IP box, especially the treatment of expenditures. This paper focuses on the situation regarding IP boxes after the implementation of the modified nexus approach, with an emphasis on changing the tax burden. These changes affect tax planning, thus managers need to know how they affect the overall tax burden of a company's investments. As a measure of these changes, the effective average tax rate (EATR) was selected. This study concentrates on three countries which have applied this approach: Hungary, the Netherlands and the United Kingdom. The results indicate that there is a new dependence after the application of the modified nexus approach: the structure of IP expenditures. The implementation of nexus approach makes the statutory income tax rate important also for IP income, and it causes a higher tax burden on IP income in the case of a small share of IP qualifying expenditures. A significant importance of the statutory corporate tax rate for the taxation of IP income is shown by changes in EATRs related to IP income after a reduction in corporate tax rates in Hungary and in the United Kingdom in 2017.

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Section: Theoretical Backgroundmentioning

confidence: 96%

Section: Theoretical Backgroundmentioning

confidence: 99%

Tax Competition and IP Boxes after the Appliction of the Modified Nexus Approach

Jedlička¹

2018

JOC

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“…Another group of studies on approaches to tax burden calculation focus on assessing the consequences of introducing tax benefits, including those for research and innovation activities. These studies are of both qualitative (assessing the relevance of tax benefits and the extent of their application by companies) and quantitative nature, for example, when their authors consider the effect of such benefits upon the effective tax rate [Bornemann et al, 2019;Evers et al, 2015]. In particular, tax incen-Dezhina I., Nafikova T., Gareev T.,Ponomarev A., Attachment 2 "Publicly available criteria for self-assessment of risks for taxpayers applied by tax authorities to select taxpayers for on-site tax audits" to the Russian FTS Order of 30.05.2007 N ММ-3-06/333@ (as amended on 10.05.2012) "On approving the On-site tax audit planning system concept".…”

Section: Existing Approaches To Calculating the Tax Burdenmentioning

confidence: 99%

Untitled

2020

Foresight and STI Governance

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is an international interdisciplinary peer-reviewed openaccess journal. It publishes original research articles, offering new theoretical insights and practice-oriented knowledge in important areas of strategic planning and the creation of science, technology, and innovation (STI) policy, and it examines possible and alternative futures in all human endeavors in order to make such insights available to the right person at the right time to ensure the right decision. The journal acts as a scientific forum, contributing to the interaction between researchers, policy makers, and other actors involved in innovation processes. It encompasses all facets of STI policy and the creation of technological, managerial, product, and social innovations. Foresight and STI Governance welcomes works from scholars based in all parts of the world. Topics covered include: • Foresight methodologies and best practices; • Long-term socioeconomic priorities for strategic planning and policy making; • Innovative strategies at the national, regional, sectoral, and corporate levels; • The development of National Innovation Systems; • The exploration of the innovation lifecycle from idea to market; • Technological trends, breakthroughs, and grand challenges; • Technological change and its implications for economy, policy-making, and society; • Corporate innovation management; • Human capital in STI; and many others. The target audience of the journal comprises research scholars, university professors, postgraduates, policy-makers, business people, the expert community, undergraduates, and others who are interested in S&T and innovation analyses, foresight studies, and policy issues. Foresight and STI Governance is published quarterly and distributed worldwide. It is an open-access electronic journal and is available online for free via: https://foresight-journal.hse.ru/en/ The journal is included into the 1st quartile (Q1) of the Scopus Cite Score Rank in the fields: Economics, Econometrics and Finance (miscellaneous) Decision Sciences (miscellaneous)

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“…( (Bornemann, Laplante, and Osswald, 2019;Evers, Miller, and Spengel, 2015). To obtain C_Patents, we recalculate C for affiliate i in year t, using IP tax rates instead of statutory corporate income tax rates (C_IP).…”

Section: Extended Income-shifting Model To Test For the Effect Of Patent Concentrationmentioning

confidence: 99%

Asymmetric Information between the Taxpayer and the Tax Authority-Income Shifting via Patents.

Amberger¹,

Oßwald²

2020

Preprint

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The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates

Cited by 17 publications

References 52 publications

Tax Competition and IP Boxes after the Appliction of the Modified Nexus Approach

Tax Competition and IP Boxes after the Appliction of the Modified Nexus Approach

Untitled

Asymmetric Information between the Taxpayer and the Tax Authority-Income Shifting via Patents.

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