A European Commission report prepared earlier this month has concluded that the UK Patent Box regime amounts to harmful tax competition.
In a report prepared by the European Commission in advance of last week’s meeting of the EU’s Code of Conduct Group on business taxation, the EC concluded that the UK Patent Box regime amounts to harmful tax competition.
This comes despite a robust defence brought by HM Treasury that the Patent Box is more tightly defined than similar research and development incentives in other EU member states, says law firm DLA Piper.
The EC’s report was considered at the October 22 meeting of the Code of Conduct Group for Business Tax. However, it is likely that the decision of the Group will only be made public in the end of semester report of the EU Economic and Financial Affairs Council, expected in December 2013.
The Code of Conduct for business taxation is intended to discourage EU Member States from introducing tax measures that constitute harmful tax competition. The Code is not legally binding but, having been adopted by Member States, carries political force.