If you’re not yet familiar with the term “patent box,” you and your head of tax compliance should pull up a chair—the idea will be coming to a tax return and financial statement near you soon.
Patent boxes (also known as “innovation boxes”) are tax regimes that allow companies to use discounted tax rates on the income generated by some intellectual property. About a dozen countries have implemented patent boxes, including Belgium, Spain, and Britain, according to a recent report from the Senate Finance Committee International Tax Reform Working Group. Lawmakers in Washington have taken notice and are starting to think the United States needs one too.
