Various countries have regimes that provide tax incentives to
encourage companies to carry out research and development work.
They are often called "Preferential IP Regimes". The UK
government introduced its Patent Box regime with significant
publicity in 2011 and the scheme took effect from April 2013. These
regimes are effective in stimulating investment in hi-tech
industries, and the UK Patent Box has been popular with hi-tech
businesses. Some regimes have, however, been criticised in recent
years because some commentators believe they may encourage
corporate tax practices that artificially shift profits to
tax-favourable countries, to the detriment of others.
Patent box regimes are thus currently under consideration by the
OECD Forum on Harmful Tax Practices. Work by the Forum has led to
the development of a proposal that national patent box schemes
should only reward expenditure that has been incurred in the
country in question, an approach that has been termed
