The Patent Box enables companies to apply a lower rate of Corporation Tax to profits earned after 1 April 2013 from its patented inventions and certain other innovations.
The Patent Box allows a 10 per cent tax-rate on patent-related profits, as opposed to the standard rate of Corporation Tax of 19 per cent.
You can only benefit from the Patent Box if your company:
- is liable to Corporation Tax
- makes a profit from exploiting patented inventions
Your company must own or exclusively license-in patents granted by the:
- UK Intellectual Property Office
- European Patent Office
- following European Economic Area countries: Austria, Bulgaria, the Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia and Sweden
Qualifying patent rights
For an intellectual property right to be a 'qualifying right', your company must also meet the development condition in relation to the patent. This means that your company must make a significant contribution to either:
- the creation or development of the patented invention
- a product incorporating the patented invention
Find out more about Corporation Tax: the Patent Box.
Note that the Patent Box regime does not apply to profits arising from other intellectual property, such as copyright or trade marks.