The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
FA 2016 introduced major changes to the patent box regime, following recommendations made by the OECD to implement an internationally developed framework for preferential IP regimes to address base erosion and profit shifting (BEPS). The commentary in this guidance note applies to the calculation of relevant IP profits of a company where:
CTA 2010, s 357C
The following guidance notes set out details of the alternative calculations of relevant IP profits:
From 1 July 2021, the rules at CTA 2010, ss 357BF–357BNC (Pt 8A, Ch 2A) (those for ‘new entrants’) apply to all companies. Where an accounting period straddles these respective dates, the period is split into two national periods, with profits and losses being apportioned on a just and reasonable basis.
The legislation sets out two alternative methods for calculating the amount of profit which qualifies for the patent box, known as the relevant IP profit:
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