UPDATE: UK agrees “Patent Box” compromise with Germany

Germany and the UK have agreed a joint proposal to advance the negotiations on new rules for preferential intellectual property (IP) regimes within the G20/OECD BEPS (Base erosion and profit shifting) Project, relating to tax breaks for intellectual property.

The proposal is based on the Modified Nexus Approach proposed by the OECD (Organization for Economic Co-operation and Development), which requires tax benefits to be connected directly to R&D expenditures, but amends these rules to address concerns expressed by some countries and seeks to address outstanding issues in relation to qualification of expenditures, grandfathering and tracking qualifying R&D expenditure.