In December 2015, the Italian Government introduced the optional tax regime of the "Patent Box" which consists in an income fiscal relief for corporate revenues generated from intellectual property rights.
In particular, the Patent Box tax regime applies to all forms of business entities like corporations; partnerships; individual entrepreneurs; stable organizations residing in white list countries.
The tax relief applies to all income derived from the exploitation of:
• Designs and models;
• Know How;
The peculiarity of the Italian Patent Box is that it extends the tax benefits to all intangibles and therefore also to know-how and software but it does not apply to nonprofit companies, professional associations and companies subject to bankruptcy proceedings.
The Patent Box will apply from the tax year following the year December 31, 2014 and to obtain the relief taxpayers must enter into an Advanced Pricing Agreement (APA) with the Italian Revenue Agency.
In the first two years (2015 and 2016) the exemption is 30% and 40% of the relevant income; thereafter it is se to 50%. Thus, from 2017 if all the expenditure underlying the resulting intangible qualifies under the nexus approach, the effective tax rate for the related income will be reduced to 15.7% instead of the standard 31.4%.
Our firm is able to assist companies and tax advisors in order to obtain the Patent Box tax benefits in drafting legal opinions on the value of assets subject to IP Patent Box, assessing the client’s IP portfolio and the registration of trademarks, software and assessing a companies’ know-how in order to identify their intangibles portfolio.