Intellectual Property Box regimes: effective tax rates and tax policy considerations

We provide a comprehensive and systematic overview of the Intellectual Property (IP) Box regimes in place in Europe. We address several aspects of the design of IP Boxes in detail which to date have received little attention, in particular the treatment of expenses related to qualifying income. Second, we incorporate IP Box regimes into effective tax rate measures for investment in a self-developed patent. In doing so, we are able to incorporate features of the tax base, including the treatment of R&D expenses. Third, we discuss IP Box policies' design features and the incentives they create.