The Centre for Intellectual Property Policy, the Centre for International Governance Innovation and the Stikeman Chair in Tax Law present: Innovation Week 2018 - Putting Innovation in a Box, which will run from February 19 to February 23.
IP & Tax Policy Colloquium - Patent Boxes
Patent Boxes are at the forefront of international tax policy discussions in government institutions at domestic and international levels. Policymakers advocating for them claim that they promote innovation. Others argue that Patent Boxes play into the increasingly worrisome ‘race to the bottom’ of international tax competition.
Due to the inherent mobility of intellectual property, a patent can represent significant value to a business and yet be transferred simply through paperwork. Multinational corporations and high net worth individuals have thus made extensive use of Patent Boxes to shift their high-value patents and related income flows, such as licensing fees, and significantly reduce their overall tax liability.
With the endorsement of the G20 countries, the world’s policy making body for tax policy, the Organisation for Economic Cooperation and Development (OECD) introduced a model for a Patent Box with an aim to prevent the revenue losses incurred and alleged capital flight caused by these regimes. The OECD established country peer-review guidelines in 2015 to help identify which Patent Boxes are 'harmful' and usher in a new order of "OECD-compliant" regimes through the exertion of international soft power.
The OECD has already begun the peer-review process of existing Patent Boxes under its guidelines. It namely reviewed France's, Belgium's and Luxembourg's, and deemed each of their Patent Boxes to be non-compliant. However, the three countries reacted differently. France has not modified its laws. Belgium amended its Patent Box with the corresponding transitional rules. Luxembourg repealed its Patent Box and has announced that it shall soon introduce a new, OECD-compliant one. For its part, Canada – where the provinces of Québec and Saskatchewan have Patent Boxes, but the federal level has none – has not yet been reviewed.
Patent Boxes are now explicitly endorsed by the OECD, and are quickly gaining ground in the mind of global economic leaders. In light of this trend, a comparative study considering the policy costs and benefits of this tax regime is necessary to provide these leaders with the tools to make the most appropriate policy choices.
Panel I - Aligning IP and Tax Policy
▪ Pierre-Emmanuel Moyse (McGill, CIPP; moderator)
▪ Alain Strowel (Louvain): “The Uneasy Case for IP: What Tax Lawyers Take for Granted”
▪ Nicolas Binctin (Poitiers): “Law and Creativity: IP or Tax?”
▪ Irma Mosquera (Leiden): “Evolving International Rules and Standards for Taxing IP”
▪ Laurens Van Apeldoorn (Leiden): “Taxing Income Where Value is Created”
Panel II - IP & Tax in Action
▪ Allison Christians (McGill; moderator)
▪ Edoardo Traversa (Louvain): “Patent Boxes: the Belgium & French Experience”
▪ Alessandra Flamini (Commission européenne): “Tax & State aids in EU law”
▪ Lyne Latulippe (Sherbrooke): “Tax Competition and IP Incentives”
▪ Jean-Pierre Vidal (HEC Montréal): “OECD, International Tax, Intangibles”
This event has been accredited for 4 hours of Continuing Legal Education for jurists by a recognized provider. Please bring a cheque made out the Faculty of Law, McGill University if you are seeking CLE hours.