Are you performing R&D activities?
Did you know that a patent box located in the Spanish jurisdiction can benefit, not only from the R&D Corporation tax credits but from a reduction of the taxable profits as well?
A combination of both measures, in practice, enables companies to apply a lower rate of Spanish Corporation tax. Herein below, you will find further guidance as to the benefits that your company can enjoy with appropriate planning and advice.
✔Income deriving from the grant to use certain qualifying intangible assets can benefit from a 40% reduction to compute the Corporation taxable base. This reduction also applies to the transfer of such qualifying assets, providing the parties involved do not form part of the same group of companies.
✔The reduction can also be applied by Spanish entities that participate in, at least, 25% of the creation of the intangible asset.
For the purposes of this reduction, income is computed on a net basis, as direct expenses and the assets’ amortization are deducted from the gross revenues.
✔ The assets are comprised of certain technological IP such as patents, designs, models, secret formulas or processes or rights on information concerning industrial, commercial or scientific equipment.
Given this restrictive list of the assets that can benefit from this tax relief, taxpayers can apply to the Spanish tax authorities for a special ruling as to whether or not the relevant assets qualify for this benefit (and their valuation) and gain confidence that an appropriate tax policy is applied.
✔ Last but not least, do not forget that this scheme applies to worldwide income arising from the exploitation or transfer of the qualifying IP rights. All in all, it will certainly help not only innovation but also the internationalization of Spanish companies.