Let's start with the example of IP boxes, widely used by multinationals
to reduce their taxable profits as we saw in modules two and three of the course.
In 2014, the European Commission stated that over the last ten years,
several member states have introduced special tax regimes for IP rights
that are supposed to stimulate innovation and investments in new technologies.
Such regimes include patent boxes, which provide for
tax reductions on income from patents.
In 2008, the Commission reviewed such a regime in Spain, and
concluded that the scheme did not constitute aid.
Since then however, the Commission has received indications
that special tax regimes seem to mainly benefit highly mobile businesses, and
do not trigger significant additional research and development activity.
The Commission is therefore gathering information to assess
whether the regimes grant a selective advantage to a particular
group of companies in breach of EU state aid rules.
What is your view on this question?
First, of course, we should note that the promotion of research and
development is, in principle, an objective which is extrinsic to the tax system, and
therefore problematic in selectivity analysis.
The TFEU, however, regards research and development as something especially
important, so that it might be permissible as a legitimate objective.
The next step would then be to verify whether a certain
IP box can cause spill-over effect, which cannot be explained by the research and
development objective.
These spill-over effects may be state aide.