International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

EU: Update on patent boxes and the EU Code of Conduct Group (Business Taxation)


van der Made

The Italian EU Presidency's Code of Conduct Group (Business Taxation) six-monthly progress report to the ECOFIN Council was finalised on December 11 2014. On patent boxes, following all discussions in the OECD Forum on Harmful Tax Practices (FHTP) around BEPS Action 5, a compromise regarding the modified nexus approach and how to assess whether there is substantial activity in an IP regime, was endorsed by the Code Group on November 20 2014. The Code Group agreed that all the EU patent box regimes that had been subject to examination by the Group are not compatible with the modified nexus approach as adapted by the compromise. As a consequence, these EU patent boxes should therefore be changed in line with the compromise. As part of the agreement, countries with existing IP regimes must agree to close these to new entrants by June 30 2016 and will abolish them by June 30 2021, after which all countries will be required to operate only nexus-compliant regimes. New entrants can therefore still enter the existing patent boxes until June 2016 and benefit from the five year grandfathering. The Code Group agreed that the legislative process necessary to give effect to that change and the related monitoring by the Code Group should commence in 2015. The Netherlands has made a reservation regarding the scope of IP assets qualifying for tax benefits under an IP regime in respect of the compromise regarding the modified nexus approach.

The modified nexus approach allows a taxpayer to receive benefits on IP income in line with the expenditures linked to generating the income. The UK-German proposal has since been endorsed by all OECD and G20 countries.

Bob van der Made (

PwC Brussels

Tel: +31 88 792 3696


more across site & bottom lb ros

More from across our site

The General Court reverses its position taken four years ago, while the UN discusses tax policy in New York.
Discussion on amount B under the first part of the OECD's two-pronged approach to international tax reform is far from over, if the latest consultation is anything go by.
Pillar two might be top of mind for many multinational companies, but the huge variations between countries’ readiness means getting ahead of the game now, argues Russell Gammon, chief solutions officer at Tax Systems.
ITR’s latest quarterly PDF is going live today, leading on the looming battle between the UN and the OECD for dominance in global tax policy.
Company tax changes are central to the German government’s plan to revive the economy, but sources say they miss the mark. Ralph Cunningham reports.
The winners of the ITR Americas Tax Awards have been announced for 2023!
There is a ‘huge demand’ for tax services in the Middle East, says new Clyde & Co partner Rachel Fox in an interview with ITR.
The ECB warns the tax could leave banks with weaker capital levels, while the UAE publishes guidance on its new corporate tax regime.
Caroline Setliffe and Ben Shem-Tov of Eversheds Sutherland give an overview of the US transfer pricing penalty regime and UK diverted profits tax considerations for multinational companies.
The result follows what EY said was one of the most successful years in the firm’s history.