The OECD's Nexus Approach to IP Boxes: A European Union Law Perspective

30 Pages Posted: 9 Apr 2015

See all articles by Rafael Sanz Gomez

Rafael Sanz Gomez

University of Seville - Facultad de Derecho

Date Written: 2015

Abstract

IP boxes or patent boxes can be introduced so as to promote research and development (R&D) activities or attract mobile IP assets, but they can also cause harmful tax competition. Action 5 of BEPS project has analysed this problem and proposes the application of a ‘nexus approach’ that aligns R&D expenditures with the conferment of tax benefits. If this nexus approach is adopted by EU member states, they will have to respect state aid rules and fundamental freedoms. This paper analyses the OECD's nexus approach, the Anglo-German joint statement proposing a ‘modified nexus approach’, and the Italian IP box. The compatibility with EU law of all three and their likeliness to prevent harmful tax competition is assessed.

Keywords: BEPS, IP boxes, tax competition, state aid, freedom to provide services, freedom of establishment

Suggested Citation

Sanz Gomez, Rafael, The OECD's Nexus Approach to IP Boxes: A European Union Law Perspective (2015). WU International Taxation Research Paper Series No. 2015 - 12 , Available at SSRN: https://ssrn.com/abstract=2589065 or http://dx.doi.org/10.2139/ssrn.2589065

Rafael Sanz Gomez (Contact Author)

University of Seville - Facultad de Derecho ( email )

calle Enramadilla, 18-20
Seville, Sevilla 41011
Spain

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