IP Box Tax Relief

IP Box allows a preferential 5% tax rate to be applied to qualifying income derived from certain intellectual property rights created, developed or improved as part of research and development activities.

The relief may be particularly relevant for businesses developing their own technologies, software and solutions protected by intellectual property rights.

Which rights may qualify for IP Box?

The regulations provide a closed catalogue of qualifying intellectual property rights. Depending on the nature of the business, these may include:

patents,
protection rights for utility models,
rights arising from the registration of industrial designs,
copyright in computer programs,
other rights listed in the regulations governing IP Box.

A qualifying right must have the required connection with the taxpayer’s R&D activities.

What is the benefit?

The standard CIT rate for many businesses is 19%, while qualifying IP Box income may be taxed at a rate of 5%.

However, the preferential rate applies to qualifying income and not automatically to the company’s entire income.

What is particularly important when applying IP Box?

Using IP Box requires the correct:

identification of the qualifying intellectual property right,
demonstration of its connection with R&D activities,
determination of revenue and costs attributable to the relevant right,
calculation of qualifying income and the appropriate ratio,
maintenance of the required records.

In certain situations, IP Box and R&D tax relief can operate alongside each other, so it is worth analysing them together rather than as two completely separate instruments.

Check whether your company can benefit from the relief

We will analyse your company’s activities and expenditure and assess whether the available tax incentives can be applied. The initial assessment is free of charge and involves no obligation to continue working with us.