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- consultation document confirms preferential regime limited to EU patents and not other forms of intellectual property nor patents granted in other countries
- software not covered by UK patent law so this industry will not be covered by the regime
- good news for start ups with profits on patent sales covered by the regime
Commenting on a consultation document issued by HM Treasury today on the proposed operation of a “patent box” regime under which profits arising from patents would be taxed at a preferential rate of 10 percent, Jonathan Bridges, Associate Partner at KPMG in the UK, said: “The consultation document today on the patent box regime is overall very positive for businesses deriving profits from UK or EU patents. It seems that the government is making a real attempt to create a workable regime around a complicated issue.
“And in deciding on core characteristics of the new regime, the government has in a number of areas opted for a broad application of the rules. Notably profits on the sale of patent rights will benefit from the 10 rate which will be welcomed by smaller R&D focused starts ups selling on pre-commercialised products.
“But anyone hoping to see the scope of the regime extended beyond UK or EU patents will be disappointed. The document makes clear that the government only intends that the regime should apply to these patents. Some had been arguing that other types of intellectual property (brands, trademarks and so on) and patents registered in other jurisdictions (for example the US) could be included. Their exclusion means that some industries will find they cannot benefit from this regime, among the most notable being the software industry as UK patent rules tend not to cover software whereas in the US they do.”
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For further information please contact:
Margot Cowhig, KPMG Corporate Communications
Tel: 0207 694 4246 Mobile: 07920 274856: margot.cowhig@kpmg.co.uk
KPMG Press Office: 0207 694 8773
Notes to editors.
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
