{"id":237,"date":"2019-10-22T17:10:00","date_gmt":"2019-10-22T15:10:00","guid":{"rendered":"https:\/\/www.act.com.mt\/?p=237"},"modified":"2019-11-25T05:14:08","modified_gmt":"2019-11-25T04:14:08","slug":"patent-box-regime-deduction-rules-continued","status":"publish","type":"post","link":"https:\/\/www.act.com.mt\/news\/patent-box-regime-deduction-rules-continued\/","title":{"rendered":"Patent Box Regime (Deduction) Rules (continued)"},"content":{"rendered":"\n<p>The Government of Malta has by means of Legal Notice 208 of 2019, recently published new rules, introducing a patent box regime on qualifying intellectual property (IP).&nbsp; The deduction is applicable to qualifying income derived from qualifying intellectual property on or after the 1<sup>st<\/sup>&nbsp;January 2019.<\/p>\n\n\n\n<p>The Patent Box Regime deduction shall be calculated by means of the following formula<\/p>\n\n\n\n<p><strong>95% X (Qualifying IP Expenditure \/ Total IP Expenditure) X Income or Gains derived from Qualifying IP<\/strong><\/p>\n\n\n\n<p>The entitlement to the deduction is subject to the satisfaction of the following conditions:<\/p>\n\n\n\n<ul><li>the&nbsp; research, planning,&nbsp; processing,&nbsp; experimenting,&nbsp; testing,&nbsp; devising, designing,&nbsp; development&nbsp; or&nbsp; similar&nbsp; activity &nbsp;leading&nbsp; to&nbsp; the creation,&nbsp; development,&nbsp; improvement&nbsp; or&nbsp; protection of&nbsp; the qualifying&nbsp; IP,&nbsp; shall&nbsp; be&nbsp; carried&nbsp; out&nbsp; wholly&nbsp; or&nbsp; in&nbsp; part&nbsp; by&nbsp; the beneficiary, solely or together with any other person or persons or in terms of cost sharing arrangements with other persons, whether resident in Malta or not:<\/li><\/ul>\n\n\n\n<p>The above-mentioned activities include among others:<\/p>\n\n\n\n<p>functions which are performed by employees of other enterprises, which employees&nbsp; are acting under the specific directions of the beneficiary in a manner equivalent to that of employees of&nbsp; the beneficiary;<\/p>\n\n\n\n<p>functions carried out through a permanent establishment (including a&nbsp; branch) situated in a jurisdiction other than the jurisdiction of tax residence of the beneficiary, where such PE derives income which is subject to tax in the jurisdiction in which the beneficiary is tax resident.<\/p>\n\n\n\n<ul><li>the beneficiary shall be the owner of the qualifying IP or the holder of an exclusive license in respect of the qualifying&nbsp; IP.&nbsp; Where&nbsp; the activities are carried out together with any other person or persons or in terms&nbsp; of&nbsp; cost&nbsp; sharing&nbsp; arrangements&nbsp; with&nbsp; other&nbsp; persons,&nbsp; the beneficiary&nbsp; must&nbsp; own&nbsp; or&nbsp; share&nbsp; in&nbsp; the&nbsp; ownership&nbsp; of&nbsp; the qualifying IP or be the holder of an exclusive license in respect thereof.<\/li><li>the qualifying IP is granted legal protection in at least one jurisdiction;<\/li><li>the&nbsp; beneficiary&nbsp; maintains&nbsp; sufficient&nbsp; substance&nbsp; in terms of physical presence, personnel, assets or other relevant indicators,&nbsp; as&nbsp; is&nbsp; commensurate&nbsp; with&nbsp; the&nbsp; type &nbsp;and&nbsp; extent&nbsp; of activity being carried out in the relevant jurisdiction in respect of the qualifying IP;<\/li><li>where&nbsp; the&nbsp; beneficiary&nbsp; is&nbsp; a&nbsp; body&nbsp; of&nbsp; persons,&nbsp; such beneficiary is specifically empowered to receive such income; and<\/li><li>the&nbsp; beneficiary&nbsp; requests&nbsp; the&nbsp; Patent&nbsp; Box&nbsp; Regime deduction in computing his income or gains in the tax return.<\/li><\/ul>\n\n\n\n<p>Where&nbsp; a&nbsp; benefit&nbsp; is&nbsp; claimed&nbsp; in respect of a patent that is still pending, and the application is eventually rejected, any such benefit claimed shall be&nbsp; reversed&nbsp; by&nbsp; making&nbsp; the&nbsp; appropriate&nbsp; adjustment&nbsp; in&nbsp; the&nbsp; year&nbsp; in which it is ascertained that the particular patent will not be issued.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Government of Malta has by means of Legal Notice 208 of 2019, recently published new rules, introducing a patent box regime on qualifying intellectual property (IP).&nbsp; The deduction is applicable to qualifying income derived from qualifying intellectual property on or after the 1st&nbsp;January 2019. The Patent Box Regime deduction shall be calculated by means [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":193,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":"","wds_primary_category":1},"categories":[1],"tags":[14,11,13],"_links":{"self":[{"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/posts\/237"}],"collection":[{"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/comments?post=237"}],"version-history":[{"count":0,"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/posts\/237\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/media\/193"}],"wp:attachment":[{"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/media?parent=237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/categories?post=237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.act.com.mt\/wp-json\/wp\/v2\/tags?post=237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}