Interested in the Luxembourg IP Rights special Tax Regime?
An Exceptional Tax Regime for IP Rights
Luxembourg taxpayers owning LU Intellectual Property Rights (IP rights) may benefit from a special tax regime introduced in 2008. A company may benefit from a tax exemption of 80% on the net income derived from royalties for the use and/or exploitation of IP rights Luxembourg as well as a tax exemption of 80% on revenue derived from a sale or an alienation of IP rights in Luxembourg.
Therefore this regime adequately combines two objectives: it allows for a full deduction of all R&D expenses for projects that do generate any commercial results while successful R&D projects are not penalized through excessive taxation once they are applied in real life.
Legal Basis for IP Rights
The IP rights tax regime was introduced by the Law of 21 December, 2007, which introduced new provisions of Article 50bis §1 and 3 LIR. On March 5, 2009 Luxembourg tax authorities issued a Circulaire on the Luxembourg IP tax regime, which includes guidance on interpretation of the new provisions. The law of 19 December 2008 has broadened the scope of the IP regime as set out in the law of 21 December 2007. These changes are the following :
Qualifying IP assets held by Luxembourg companies will be exempt from the net wealth tax of 0.5%;
Domain names are, as from tax year 2008, eligible to the 80% tax exemption on income derived from intellectual property.
Applicable IP Rights in the Grand Duchy
The tax regime applies to the following IP rights acquired by a Luxembourg company after January 1st, 2008:
Copyrights on software
Why You Need IP Lawyers in Hance Law?
Our team of Technologies & IP lawyers is very famous in intellectual property right Luxembourg. It combines specific legal expertise with a thorough understanding of the market their clients operate in.
The team’s particular strength is its cutting edge understanding of the technical aspects which allows giving efficient legal advice to businesses that are active in or rely on technology and communications and to which IP is an essential asset.
Hance Law IP Rights Protection
Hance Law advises on all aspects of intellectual property rights including:
Patents & Technology
Brands & Trade Marks
Copyright, database rights & confidential information
Licensing & Commercial agreements
Corporate transactions & financings