On 4 August 2017 the Luxembourg government filed a bill of law proposing a new intellectual properties (IP) regime which aims to be compliant with action 5 of the BEPS report.
If passed, the qualifying IP 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,….)
- 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 so that acquisition costs of existing assets would not be eligible.