New IP regime in Luxembourg

25 September 2017

On 4 August 2017, the Luxembourg government filed a bill proposing a new intellectual property (IP) regime which aims to be compliant with Action 5 of the OECD BEPS report.

If passed, qualifying IPs would benefit from an 80% exemption on corporate income tax and municipal business tax, as well as a 100% exemption from the net wealth tax on the assets held that qualify for the IP regime.

Eligible assets are:

  • Inventions protected by national or international provisions (patents, utility models etc.)
  • Software protected by copyright

In order to be eligible, the assets must have been created, developed or further improved after 31 December 2007.

Trademarks, domain names and designs will no longer be eligible under the new regime. A grandfathering clause of the old regime is still applicable and will expire on 30 June 2021.

The new regime is designed to favour research and development, which means that acquisition costs of existing assets would not be eligible.

Author: Gilles Krier, HLB REVILUX

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