EC withdraws investigation of UK’s Patent Box scheme

The European Commission (EC) has decided to withdraw its investigation into the UK government's Patent Box scheme in a move which is favorable to British innovators and provides greater clarity around the future of the scheme, according to intellectual property firm Withers & Rogers.

The scheme, which allows profits from inventions protected by a UK or other qualifying patent to benefit from lower corporation tax, has been helping to encourage innovation in the UK. It has seen notable criticism, including complaints by the German Finance Minister and warnings by the EC that the UK’s Patent Box legislation created unfair levels of competition, which led to the subsequent enquiries. However, Patent Box has now received broad support following a joint proposal from the UK and German governments.

Michael Jaeger, patent attorney at Withers & Rogers, said: “This is positive news for UK innovators and removes the spectre of the European Commission's intervention in Patent Box, ensuring that entrepreneurial businesses can continue to benefit from this important tax incentive for years to come. There is no doubt that the financial relief this type of scheme provides fuels innovation and allows businesses to compete more readily, especially in the technology and pharmaceutical sectors where this has been adopted more widely.”