Licensing intangibles: tax optimisation

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The benefits will surprise you

If your company’s business involves the creation of technical knowledge within an innovative activity, you can take advantage of a tax reduction for licensing your intangibles: patents, drawings, models, plans, formulae, secret procedures and know-how.

The Spanish Corporate Income Tax Law provides for a 50% reduction in taxation on income obtained from the licensing of certain intangibles to third parties or group companies to be utilised for business purposes. The limit on income qualifying for the reduction is six times the cost of creating the intangible.

The benefits could be very interesting for your business:

  • A considerable tax saving can be achieved.
  • The intangibles do not need to have been recognised as such in the accounts: recognition of the expense for creating them is sufficient.
  • Also applicable to intangibles created before 1 January 2008.
  • Compatible with R&D tax credit.
  • Applicable in tax consolidation system
  • Purely tax incentive. There is no accounting impact other than the tax saving.
  • The licensee may or may not be resident in Spain.

There are different conditions in the Basque Country, which are even more beneficial.