Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/208077
Authors: 
Gaessler, Fabian
Hall, Bronwyn H.
Harhoff, Dietmar
Year of Publication: 
2019
Series/Report no.: 
Discussion Paper 177
Abstract: 
A "patent box" is a term for the application of a lower corporate tax rate to the income derived from the ownership of patents. This tax subsidy instrument has been introduced in a number of countries since 2000. Using comprehensive data on patents filed at the European Patent Office, including information on ownership transfers pre- and post-grant, we investigate the impact of the introduction of a patent box on international patent transfers, on the choice of ownership location, and on invention in the relevant country. We find that the impact on transfers is small but present, especially when the tax instrument contains a development condition and for high value patents (those most likely to have generated income), but that invention itself is not affected. This calls into question whether the patent box is an effective instrument for encouraging innovation in a country, rather than simply facilitating the shifting of corporate income to low tax jurisdictions.
Subjects: 
patent box
IP box
innovation tax
BEPS
EPO
invention incentive
patent ownership
JEL: 
H32
H34
K34
O34
Document Type: 
Working Paper

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