The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates

T. Bornemann, S. Laplante, B. Oßwald, The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates, 2018.

Working Paper | English
Author
; ;
Abstract
We exploit a quasi-experimental setting to cleanly identify the effect of the adoption of an intellectual property box (IP box) on innovative activity and effective tax rates. We document an increase in innovative activity, including patent applications, grants, and highly-skilled employment, at the expense of patent quality. Domestic firms drive this effect. We also provide evidence that firms with patents, on average, enjoy 7.2 percent to 7.9 percent lower effective tax rates, with the most significant financial benefits accruing to multinational firms compared to domestic firms. Within multinational firms, those without outbound income-shifting opportunities appear to benefit more than other multinationals. Relative to studies that use heterogeneous IP boxes, our results suggest an IP box that provides tax benefits for patent income only leads to a reasonable increase in innovative activity of 0.4 to 5.1 percent, with multinationals benefitting disproportionately from a financial perspective.
Publishing Year
Volume
No. 2018-03
LibreCat-ID

Cite this

Bornemann T, Laplante S, Oßwald B. The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates. Vol No. 2018-03.; 2018.
Bornemann, T., Laplante, S., & Oßwald, B. (2018). The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates (Vol. No. 2018-03).
@book{Bornemann_Laplante_Oßwald_2018, series={WU International Taxation Research Paper Series}, title={The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates}, volume={No. 2018-03}, author={Bornemann, Tobias and Laplante, Stacie and Oßwald, Benjamin}, year={2018}, collection={WU International Taxation Research Paper Series} }
Bornemann, Tobias, Stacie Laplante, and Benjamin Oßwald. The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates. Vol. No. 2018-03. WU International Taxation Research Paper Series, 2018.
T. Bornemann, S. Laplante, and B. Oßwald, The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates, vol. No. 2018-03. 2018.
Bornemann, Tobias, et al. The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates. Vol. No. 2018-03, 2018.

Export

Marked Publications

Open Data LibreCat

Search this title in

Google Scholar