Patent Boxes Design, Patents Location and Local R&D

Annette Alstadsæter, Salvador Barrios (), Gaëtan Nicodème, Agnieszka Skonieczna and Antonio Vezzani

No 57, Taxation Papers from Directorate General Taxation and Customs Union, European Commission

Abstract: Patent boxes have been heavily debated for their role in corporate tax competition.This paper uses firm-level data for the period 2000-2011 for the top 2,000 corporate R&D investors worldwide to consider the determinants of patent registration across a large sample of countries. Importantly, we disentangle the effects of corporate income taxation from the tax advantage of patent boxes. We also exploit a new and original dataset on patent box features such as the conditionality on performing research in the country and their scope. We find that patent boxes have a strong effect on attracting patents mostly due to their favourable tax treatment, especially so for high quality patents. Patent boxes with a large scope in terms of tax base definition have also stronger effects on the location of patents. The size of the tax advantage offered through patent box regimes are found to deter local innovative activities while R&D development conditions tend to attenuate this adverse effect. Our simulations show that on average countries imposing such development conditions tend to grant a tax advantage which is slightly larger than optimal from a local R&D impact perspective.

Keywords: Corporate taxation; patent boxes; location; patents; R&D; nexus approach (search for similar items in EconPapers)
JEL-codes: F21 F23 H25 H73 O31 O34 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2015-06
New Economics Papers: this item is included in nep-acc, nep-eur, nep-ipr, nep-pr~, nep-pbe and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (28)

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Related works:
Journal Article: Patent boxes design, patents location, and local R&D (2018)
Working Paper: Patent boxes design, patents location, and local R&D (2018)
Working Paper: Patent boxes design, patents, location and local R&D (2015)
Working Paper: Patent Boxes Design, Patents Location and Local R&D (2015)
Working Paper: Patent Boxes Design, Patents Location and Local R&D (2015)
Working Paper: Patent Boxes Design, Patents Location and Local R&D (2015)
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