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- Luxembourg's tax system for Intellectual Property (IP) provides a partial exemption from direct taxes for eligible taxpayers in certain industries that create IP, or where the business’s added value is based on IP – such as video games and payment solutions.
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Sep 4, 2019 · The new IP regime aims to promote R&D activities largely performed in Luxembourg and offers, to Luxembourg taxpayers, an 80% tax exemption on eligible net income derived from qualifying IP. The circular (available here) is very welcome, given the complexity of the new IP regime.
- What Is The Context of The IP Box Reform in Luxembourg?
- What Are The Key Features of The New IP Box Regime?
- What Is The Purpose of The New IP Box Regime?
Nicolas Thieltgen: The first IP box regime in Luxembourg was set on 21 December 2007. Article 50bis of the income tax law in its initial version allows taxpayers to benefit from an 80% income tax exemption on the licensing of intellectual property rights. As part of the action plan introduced by the Finance ministers at the G20 meeting in October 2...
Patrick Cuignet: The new IP box regime, which should come into force by early 2018, does not differ substantially from the 2007 regime it replaces, but its scope has been amended. It sets up a tax incentive in favour of research and development to consolidate the competitive framework in the field of business innovation. A major feature of the new ...
Nicolas Thieltgen: The new regime does not constitute a mere transposition of the recommendations of the G20, OECD and European Union, but an efficient measure to foster research and development in Luxembourg as part of a long term vision. The tax incentive is subject to effective investment from foreign firms in Luxembourg. This will allow to cons...
Dec 2, 2021 · The new IP box regime introduces a new article into the income tax law, providing up to 80% exemption on all incomes earned as a result of the commercialization of certain IP rights, as well as 100% exemption from net wealth tax.
Jul 9, 2021 · On 22nd March 2018, Luxembourg had adopted a new ‘’IP Box’’ regime applicable to income (including capital gains) derived from eligible intellectual property (‘’IP’’) rights to align itself with international tax recommendations and, more specifically, the OECD’s final report on Action 5 of the Base Erosion and Profit Shifting (‘’BEPS’’) plan.
A favourable tax and legal environment: the net incomes derived from the use of patents, trademarks, designs and models, copyrights on software or domain names acquired or created after 31st December 2007 benefit from an 80 % tax exemption under certain conditions.
Nov 20, 2017 · Although, and similarly to the previous regime, the eligible net income from qualifying IP regimes will still benefit from an 80% tax exemption, the new approach shows evolution in terms of eligible assets, the income derived from such assets and the expenditures connected to such assets.
Mar 26, 2018 · The new IP Regime will be applicable as of the fiscal year 2018 and will provide, broadly speaking, for an 80% tax exemption on the eligible net income of qualifying IP rights, which, based on the current aggregate tax rate for Luxembourg City, could lead to an effective tax rate of 5.20% on said income.
