What is a Swiss Patent Box?
A Swiss Patent box is a special tax regime that allows companies to benefit from reduced taxation on income deriving from patents, trademarks and other intellectual property rights.
This regime was introduced in Switzerland in 2007 and gradually updated to attract innovative companies and promote research and development, in order to keep the factors of innovation and competence of the employees high.
To access the Swiss Patent box, companies must meet certain requirements, including:
– Have an effective seat in Switzerland and carry out substantial economic activities in the country.
– Have intellectual property rights registered or licensed by a public body or international organization.
– Conduct research and development in Switzerland or another OECD member country related to intellectual property rights.
– Calculate the taxable income according to the nexus method, i.e. the link between intangible assets and the eligible income referable to them, which takes into account the ratio between research and development costs incurred in Switzerland and the total income deriving from intellectual property rights .
What are the benefits
The advantage of the Swiss Patent box is that taxable income is reduced by 90% which will significantly reduce the effective taxation rate.
It’s nice to know that this solution also respects the BEPS international standards .
Conclusion
This will be a considerable option for companies that invest much in reserch and development, or in branding development, patents, and other intangibles asset in this area.
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