A solution to increase your IP budget
Businesses can expect a low 5.72% tax rate on income generated by trademarks, domain names, patents, designs, models and software in Luxembourg. The Luxembourg government initiative intends to promote the development of intellectual property and new technologies in the country. VAYTON recommends Luxembourg entrepreneurs to consider the IP law advantage to finance a wider brand protection and increase their IP budget.
Background of the new IP law
. December 21, 2007 - Bill 5801 was adopted to provide an 80% tax exemption for some intellectual property rights revenue, as defined in Article 50bis.
. December 24, 2007 - VAYTON Brand Capital was created to assist companies worldwide to develop and manage brands in Luxembourg.
. December 19, 2008 - Paragraph 60a, under Article 50bis, was introduced as an amendment declaring domain names as eligible intangible assets.
. March 5, 2009 - The Luxembourg tax administration published a clarification that precisely defined the conditions for granting a tax exemption.
Below are questions and answers about how this unique, attractive tax advantage may benefit your business.
What Kinds of Intellectual Property Apply? Net revenues generated by trademarks, domain names, patents, registered designs as well as copyright on software are granted up to an 80% tax exemption.
What Are the Requirements for Qualifying? The two main conditions are: (1.) Intellectual Property was created or acquired after December 31, 2007, (2.) Intellectual Property is licensed by a Luxembourg company; or patents are used internally by a Luxembourg company
Who Benefits from the Tax Exemption? New companies and businesses that regularly launch new products, brand owners and domain names owners, software designers, architects or franchisers with international development operating within Luxembourg benefit amongst others from this new law.