'Patent box' scheme to encourage innovation and research Von Schonertagen
Certain EU member states, Britain and the Netherlands included, are offering the patent box scheme, which allows companies to lower corporate tax rates to profit earned from patents, as an incentive for new innovative patented products to be developed and to create more research jobs. According to the Guardian, Mr Schäuble has called for a ban on the tax break and a review of the rates arguing that it renders competition for foreign investment as biased and unfair and that it colludes with EU policy that aims to prevent these kinds of rules from happening. 'That's no European spirit,' he said, 'You could get the idea they are doing it just to attract companies.'
UK patent and trade mark firm Marks & Clerk International has commented on Germany's opposition to the scheme, defending the UK's regime as more exclusive than it has been claimed to be by only benefitting a select few types of company. 'There is a difference between low tax regimes designed simply to attract virtual holiding companies with all sorts of intangible assets and those schemes designed to encourage or reward good behaviour, such as the R&D tax credits and Patent Box regimes,' said chairman Keith Hodkinson, adding that 'under the UK system you have to spend the money first before you get anything back.' Mr Hodkinson also pointed out that Germany is ahead of both the UK and the Netherlands in direct government subsidy as a percentage of GDP, and so to focus on 'just one measure of support is disingenuous'.