The Norwegian financial paper “Dagens Næringsliv” writes about tax holes in an editorial on 18 June 2013 and cites how the UK now will lower taxes to 10% for most revenues from patented technology (called “The Patent Box”). An invention funded by the Norwegian government can quickly be moved and used to build business in another country. Benelux countries have similar arrangements that partially encompass other intellectual property rights (IPR) than patents. France, Spain and Hungary have the same. The Patent Box is not a new invention, but having such a scheme in the UK increases the likelihood of R&D-based industry moving out of Norway.
Large corporations may move their IPR to countries with low tax rates, such as Switzerland, and then use rather complex royalty flows and tax treaties between countries to have the income from IPR taxed as low as possible. In the Netherlands tax on income from patents can be 5% in Malta 0%; the British 10% is favourable only when viewed together with other programs that support research and development. The British "Patent Box" is however relatively simple, so even small companies can benefit from the low tax rates on revenues from patented technology, the complexity is basically like any scheme for tax deduction. Ireland dropped its system of tax rebates for royalty revenues in 2011 partly due to pressure from other EU countries, and partly by their Tax Commission finding that it did not promote research and development in Ireland. It is not obvious what is best for innovation, but may be since the Norwegian business sector is not knowledgeable about how to benefit from the international patent system , tax incentives probably would make the CFOs more aware of the real value of IPR, and thus increase Norwegian competitively.
Norwegian government in April presented a White Paper on IPR, but did not take up the discussion of how Norway should align with the tax regimes for IPR with in the EEA. The new NorwegianTax Commission headed by Hans Henrik Scheel should look into this question.
(Text from comment in Norwegian in Dagens Næringsliv 2013-06-24, see below
- artikkel "Skarp konkurranse" om IPR og skattefradrag fra artikkel i Dagens Næringsliv 2013-06-24, se under )