Cross-Country Evidence on the Preliminary Effects of Patent Box Regimes on Patent Activity and Ownership
32 Pages Posted: 27 Oct 2015
Date Written: October 15, 2015
This paper evaluates the initial impacts of patent box regimes in light of their primary stated objectives: stimulating domestic innovation and retaining mobile patent income to limit base erosion. Despite their lack of nexus requirements, we find that patent box regimes yield a 3 percent increase in new patent applications for every percentage point reduction in the tax rate on patent income. We find no significant impact of these regimes on deterring outward cross-border attribution of patent ownership, or on attracting ownership of foreign inventions. Increased patenting activity hence appears focused on inventions involving co-located (domestic) patent owners and inventors.
Keywords: patent box, tax policy, innovation, base erosion
JEL Classification: K34, H25, H32
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