IP Box: Would a special IP income tax rate boost Canada’s flagging innovation?

C.D. Howe | John Lester | Apr 5, 2022

IP box - IP Box:  Would a special IP income tax rate boost Canada's flagging innovation?Canada needs to create an Intellectual Property (IP) Box to improve its lacklustre innovation performance, according to a new study from the C.D. Howe Institute. An IP Box would tax income from patents and other intellectual property at a special low rate. This initiative would boost Canada’s flagging business investment in R&D, raise our low commercialization rate, and stem an outflow of IP profits to tax havens.

Author John Lester examines Canada’s case for an IP Box, and describes how it could be designed and implemented.

See:  A new way of measuring the elusive value of intellectual property

The key argument for this measure is that it defends against “poaching” of highly mobile IP income by low tax jurisdictions, particularly tax havens, writes Lester. The standard counterargument is that IP Boxes trigger competition for mobile IP income, which will eventually drive the preferential tax rate down to zero. However, this criticism has lost its force due to two developments. The first is an OECD-inspired international agreement that income taxed at a preferential rate must be derived from R&D performed in the implementing jurisdiction. The second is the tentative agreement on a global minimum tax rate. With these two developments, an IP Box can protect Canada’s tax base without engendering competition for highly mobile IP income.

“An IP Box is a cost effective way to boost R&D and commercialization in Canada because it is partly financed by tax revenue recovered from tax havens,” says Lester.

Continue to the full article --> here

Download the full 15 page PDF briefing --> here


NCFA Jan 2018 resize - IP Box:  Would a special IP income tax rate boost Canada's flagging innovation?The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - IP Box:  Would a special IP income tax rate boost Canada's flagging innovation?FF Logo 400 v3 - IP Box:  Would a special IP income tax rate boost Canada's flagging innovation?community social impact - IP Box:  Would a special IP income tax rate boost Canada's flagging innovation?
FFCON23 Fintech Funding Deal Flow - IP Box:  Would a special IP income tax rate boost Canada's flagging innovation?

Share for a Chance to Win FREE #FFCON23 Virtual Event Tickets!!


As a part of the lead-up to this exciting event, NCFA will be holding a social media contest for the chance to win FREE tickets to attend. In order to be entered to win, all you’ll need to do is share any of our event posts or create one of your own through your Facebook, Twitter, Instagram or LinkedIn personal or company page, tag @NCFACanada, and use #FFCON23. Winners will be contacted prior to the event. We look forward to seeing you there!

FFCON23 Share on Social for Chance to Win Free Tickets  - IP Box:  Would a special IP income tax rate boost Canada's flagging innovation?

Support NCFA by Following us on Twitter!







NCFA Sign up for our newsletter - IP Box:  Would a special IP income tax rate boost Canada's flagging innovation?




 

Leave a Reply

Your email address will not be published. Required fields are marked *

20 + 10 =