Europe
Malta IP Box Regime
95% deduction yields effective 1.75% rate when nexus ratio is 1
Indefinite · Foreign income partly exempt
Europe
United Kingdom Patent Box Regime
UK Patent Box can reduce corporation tax to 10% on qualifying patent profits. It is election-based and calculation-heavy, but can materially lower the IP tax burden for eligible companies.
Regime overview
- Status
- Active
- Type
- Preferential
- Established
- 2013
- Duration
- Indefinite
- Highlight
- 10% effective rate on qualifying patent profits
Tax situation
Default Rates
- Eligibility
- Any resident
- Duration
- Indefinite
- Income Tax
- 0-45%
- Foreign Income
- Taxed
- Capital Gains
- 18-24%
- Dividends
- 8.75%
- Wealth Tax
- None
- Inheritance Tax
- 40%
Patent Box Regime
- Eligibility
- Residency
- Duration
- Indefinite
- Income Tax
- 10%
- Foreign Income
- Taxed
- Capital Gains
- Domestic at standard rates
- Dividends
- Domestic at standard rates
- Wealth Tax
- None
- Inheritance Tax
- None
| Tax Type | Default | Patent Box Regime |
|---|---|---|
| Eligibility | Any resident | Residency |
| Duration | Indefinite | Indefinite |
| Income Tax | 0-45% | 10% |
| Foreign Income | Taxed | Taxed |
| Capital Gains | 18-24% | Domestic at standard rates |
| Dividends | 8.75% | Domestic at standard rates |
| Wealth Tax | None | None |
| Inheritance Tax | 40% | None |
Key benefits
Qualifying patent profits taxed at effective 10% corporation tax
Relief for patented products and licensing income, subject to nexus
Established election-based incentive for UK-linked R&D patents
Requirements and considerations
None
Migration pathways
Residency Visas
Program details
The UK Patent Box is a preferential corporation tax regime that allows companies to elect into a reduced effective rate on profits attributable to qualifying patents. It was introduced from 1 April 2013 as part of the UK's IP commercialization strategy.
The headline benefit is an effective 10% corporation tax rate on qualifying profits, calculated via a deduction rather than a simple alternative tax rate. Eligibility depends on holding or exclusively licensing qualifying patents and meeting development conditions, with profit calculations restricted by a nexus approach.
The regime does not change personal tax rates, and it does not make trademarks or brand marketing profits eligible for the reduced rate. Companies still pay standard corporation tax on non-qualifying profits.
Practically, Patent Box is claimed through the company tax return process and requires careful scoping of qualifying income streams, cost allocation, and documentation. It is often evaluated alongside R&D tax relief and transfer pricing strategy.
Interested in Patent Box Regime?
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Schedule consultationOther tax regimes
Europe
Slovakia Patent Box Regime
50% exemption roughly halves corporate tax on qualifying IP income
Indefinite · Foreign income partly exempt
Europe
Lithuania IP Box Regime
A reduced 7% corporate income tax rate can apply to taxable profits from the commercial exploitation of qualifying IP, materially below Lithuania's standard CIT rate
Indefinite · Worldwide taxation
Europe
Poland IP Box Regime
5% tax on qualifying IP income
Indefinite · Worldwide taxation
Population (mid-2024 estimate)
Office for National Statistics·Last checked: 13/01/26
Income tax rates and bands
GOV.UK·Last checked: 13/01/26
Capital gains tax rates
GOV.UK·Last checked: 13/01/26
Dividend tax rates
GOV.UK·Last checked: 13/01/26
Inheritance tax
GOV.UK·Last checked: 13/01/26
Foreign Income and Gains (FIG) regime
GOV.UK·Last checked: 13/01/26
Immigration authority
UK Visas and Immigration·Last checked: 13/01/26
Expert guidance
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