Reform of the patent income regime (IP box): 10% rate under the nexus approach

Article 37 of the 2019 Finance Act replaces the long-term capital gains regime for income from licensing and selling patents with separate taxation at a 10% rate on the net income from these assets (Art. 238 of the General Tax Code), on an optional basis. It covers patents, utility certificates, plant variety certificates, copyright-protected software and certain patentable inventions. Eligible income is proportionate to the share of research expenses incurred by the company itself (OECD nexus approach, BEPS action 5). Applicable to financial years beginning on or after 1 January 2019.