Spain is one of the friendliest tax jurisdictions to locate your Patent Box. A combination of the special tax system provided by Spanish Corporation tax regulations with the R&D tax credits can certainly increase your Company’s profitability by reducing its effective tax rate.
Today, we remind our readers of the main features of this tax system and the most recent developments as of Sept. 29, 2013.
✔ Only 40% of the net income derived from the assignment of a list of qualifying intangible assets (including patents, know how, designs or models, for example) is taxed, which reduces the effective Corporation tax rate far below the standard 30%.
✔ This regime applies not only to the income derived from the rights of use and exploitation, but also to the income originated from the transfer of intangible assets, when it is transferred to a non-group company and whether or not the assignee is a Spanish resident.
✔ It is required that the grantor has substantially created the assets by, at least, 25% of their cost.
Besides, there is no limitation on the amount of income benefiting from the tax relief.
✔ If your company wants to be assured that the qualification of the assets are eligible for this fiscal system, as well as the valuation of the corresponding income and expenses, an advanced agreement can be obtained from the Spanish tax authorities.