This paper evaluates the initial impacts of patent box regimes in light of their primary stated objectives: stimulating domestic innovation and retaining mobile patent income to limit base erosion. Despite their lack of nexus requirements, we find that patent box regimes yield a 3 percent increase in new patent applications for every percentage point reduction in the tax rate on patent income. We find no significant impact of these regimes on deterring outward cross-border attribution of patent ownership, or on attracting ownership of foreign inventions. Increased patenting activity hence appears focused on inventions involving co-located (domestic) patent owners and inventors.
- patent box,
- tax policy,
- base erosion
Available at: http://works.bepress.com/sebastien_bradley/9/