Italian Patent Box

The Patent Box regime is a tax benefit that was introduced in Italy in 2015. The purpose of the Patent Box is to support the taxpayers that perform research and development of certain intangible assets.

Following the Patent Box regime, companies and individuals that receive income from their own or licensed intellectual property are eligible for partial relief from the corporate income and regional taxes. Specifically, such entities can be eligible for up to 50% tax exemption on income arising from direct or indirect exploitation of intangibles, including licensing of the intellectual property and earned royalties. Companies that apply for the Patent Box regime can benefit from it for the next 5 years irrevocably.

Who is eligible for the Patent Box benefits?

• Companies, cooperatives, other legal entities carrying out business activities;
• Natural persons;
• Non-resident taxpayers that are permanently established in Italy and that are residents of a country which has signed a tax treaty with Italy for purposes of effective exchange of information

Which intangible assets can be qualified for the Patent Box?

• Copyrighted software
• Industrial and other business know-how
• Patents that are already granted or are to be granted
• Other protected intellectual property, e.g. models and designs

How can you receive the Patent Box benefits in Italy?

First of all, there needs to be a direct link between the research and development functions and the intellectual property that is qualified for Patent Box. Secondly, the income must be gained from that qualified IP.

In order to obtain the Paten Box tax exemption, the taxpayer must obtain a favourable advance tax ruling from the Italian Revenue Agency (Agenzia delle Entrate). The Revenue Agency determines in each individual case the amounts of income that can be attributed to the exploitation of the qualified intangible assets. Optionally, the qualified entities may also initiate the ruling procedure in order to determine the capital gains from the related party transactions.

How can we assist you?

If you need market data to support the royalty rate for your intangible asset, RoyaltyRange can provide you the most up-to-date information about the royalty rates in your industry.

Whatever IP you own, you can find the latest royalties by searching the RoyaltyRange database. We have pre-prepared royalty reports for a number of industries, which are ideal if you need royalties data instantly. Or you can use our One Search service to get a bespoke royalty rates report based on your specific product.