The Patent Box Regime: tax benefits for Companies

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The Portuguese Patent Box tax regime


“Portugal has adopted a tax incentive regime, known as Patent Box regime, in which income deriving from the commercial exploitation of patents, industrial designs or models and software copyrights (income from contracts for the temporary cession or use of copyrights on computer programs and, income derived from the definitive transfer (sale) of the ownership of the copyright on the software owned by the taxpayer, or from the licensing of that software) is exempt of taxation on 50% (becoming 85% with the State Budget for 2022) of its amount, for corporate income tax purposes.


The incentive’s target income is determined by calculating the difference (in positive balance) between the income and gains earned by the taxpayer in the relevant tax period and the expenses or losses incurred or borne by the taxpayer, in that same tax period, for research and development activities that resulted in, or benefited from, the industrial property right responsible for the income.


Both parties – the transferor, who is the one that transferring or granting the IP right, and the transferee, who is the one to whom the right is grated – must be parties to a contract of temporary transfer or use of industrial property that will generate taxable income. It is regarding these two parties that the law establishes requirements that must be met for the favourable regime to apply.” (…)


Read the full insight here: Patent Box Tax Regime.By Raquel de Matos Esteves.