With effect January 1st, 2013 the Patent Box in Spain was modified. Thus, the tax treatment of income from certain intangible assets, regulated in Article 23 of the Corporation Tax Act is going to be modified in the terms described below. The Law is currently being discussed in the Parliament, but there is little doubt that it shall be passed.
As explained in our post using Spain to set up a patent box company , the tax incentive currently in force consist in an exemption of 50 % of the revenue derived from certain intangible assets.
In this respect, it is intended that the incentive falls on the net income (ie,gross income minus expenses) rather than on the revenue of such assets. Upon entry into force of the proposed modifications, 60 % of the net income from this assets shall be exempt. When R & D expenses are not activated, for not complying with the requirements of accounting standards, the net income shall be deemed to be 80% of the revenue of said assets.
Moreover, instead of full asset creation, assets developed by the tax payer in as low as 25% shall also qualify for the tax incentive. In addition, the tax incentive will also apply to the price received from the transfer of the intangible assets and not only to the royalties perceived from the licensees as consideration for the use or right of use of such assets.
One of the most important aspects of the new regulation is that the quantitative limit set out in existing paragraph 2 of Article 23 of the Law has been eliminated. To date the exemption was limited to six times the cost of the intangible created.
Finally, in order to provide legal certainty in the application of this incentive, tax payers may apply to the tax authorities for advanced agreements relating to the qualification of assets for this tax regime and the measurement of income and expenses related said assets