UK Patent Box To Be Closed

Finance Act 2012 introduced the UK Patent Box whereby, for accounting periods beginning on or after 1 April 2013, a company may elect for so much of its profits as arise from the exploitation of relevant patents to be brought within the new tax regime which, in broad terms, aims to reduce the effective rate of corporation tax on such profits to 10%.

The UK Patent Box has met with significant opposition from many other States, including Germany.  The UK Patent Box also threatened to become a significant obstacle to the international political consensus that is required to pursue the OECD Base Erosion and Profit Shifting (BEPS) project which project aims, by December 2015, to come up with a series of proposals for significant reform of the international tax rules.