| Title of Document: |
Luxembourg is becoming the European Hub for IP |
| Keywords: |
Luxembourg IP regime, Intellectual Property taxes, capital gain tax |
| Author: |
HT Group Newsletter |
|
|
| Codex-online publication date: 01/21/2010 |
| Date of Original Publication: 01/21/2010 |
| Country: Luxembourg |
Summary: Since the 21st of December 2007, the new Luxembourg IP regime has caused a stir amongst other EU nations. The 80% tax exemption on income derived from intellectual property as well as the capital gains resulting from the disposal of IP, has resulted in Luxembourg becoming an extremely attractive destination for IP. |
|
The definition of IP in Luxembourg acquired from third parties is broad; including patents, copyrights on software, trademarks, designs and models unlike the Belgian jurisdiction which is far more restrictive.
The taxation benefits are considerable as only 20% from the net income out of IP will be taxed at 28,59% which provides an effective tax burden of roughly 5.17%.
The amendments introduced on the 19th of December 2008, have resulted in qualifying IP assets held by Luxembourg companies being exempt from the net wealth tax of 0.5% and domain names are, as from tax year 2008, eligible to the 80% tax exemption on income derived from intellectual property.
Conditions that need to be fulfilled:
1. The IP must have been created or acquired after 31 December 2007;
2. The expenses in connection with the IP must be recorded as an asset in the balance sheet for the first book year for which the application of the regime is demanded;
3. The IP may not have been acquired from a person who is qualified as an “affiliated company”. The concept of affiliated company is clarified below.
Company X is considered as an affiliated company to company Y if :
• Company X directly holds 10% in the share capital of Y
• Company Y directly holds 10% in the capital of X
• 10% or more of the share capital of X and Y are directly held by the same company.
If you would like to know more information on how you could benefit from Luxembourg’s IP regime, you can contact Karl Horsburgh on +352 4040341 or send an email to advice@htgroup.lu
HT Group Newsletter
|
|
|
|
|
|