The Patent Box – Harmful competition? – Status update

John Moore, December 20th, 2013 John Moore

Background

This is an update on the progress to date on this issue further to our article dated 20 November on the potential for the UK Patent Box to fall foul of the EC Code of Conduct Group’s rules on harmful competition and their referral to ECOFIN of the consideration of this matter.

Status

Draft minutes of the meeting of ECOFIN in December 2013 reveal that the Code of Conduct Group have been invited to “Assess or consider all patent boxes in the EU, including those already assessed or considered before, by the end of 2014, ensuring consistency with the principle of equal treatment, also against the background of international developments, including those in relation to the OECD BEPS initiative.”

The group is to report back on its work to ECOFIN by the end of 2014.

Our view

This move will, to some extent, remove any immediate uncertainty over the potential for changes to the regime in its current form. The review of all the regimes, including ones that have already been approved as not being harmful competition seems fairer than singling out the UK’s new regime.

Companies should therefore continue to prepare for and make elections for the Patent Box relief under the legislation as it stands.

Please do not hesitate to contact John Moore on 0207 292 8850 or at john.moore@kinglybrookesllp.co.uk if you would like to discuss the implications of this for your company.

This briefing is prepared by Kingly Brookes LLP, a limited liability partnership. For further information on any of the material contained in or referred to in the briefing, please contact us. This briefing note is intended to keep our readers up to date with the developments in this area, but it is a general guide only and is not intended to be a comprehensive statement of the law and practice in this area. No liability is accepted for the opinions it contains or for any errors or omissions.