Intellectual Property (IP) can be one of the most valuable assets an organization owns. If IP is critical to your business, choosing the right location for the centralisation and management of the IP is a key strategic business decision. The ideal location to establish an IP structure is one that can serve the organisation’s business strategies and model, safeguard and protect its IP, taking into consideration possible tax implications.
In order for IP to benefit from the applicable IP regime it must be categorised as a “Qualifying Intangible Asset”. Qualifying intangible assets refer to an asset that was acquired, developed or exploited by a person in performance of his business (excluding intellectual property associated to marketing), which relates to research and development activities, and includes intangible assets for which only economic ownership exists.
These assets are:
- patents as defined in the Patents Law;
- computer software;
- other IP assets that are non-obvious, novel and useful, where the person which utilizes them in further development of a business that doesn’t generate annual gross revenues exceeding Euro 7.500.000 (or Euro 50.000.000 for a group of companies).
Assets not treated as qualifying intangible assets include: business names, brands, trademarks, rights to public presence, image rights and other intellectual property rights.
In short, the effective corporation tax rate can be reduced to only 2.5%, being the lowest possible corporate tax rate in the EU.