Patent box is a special tax regime designed for legal entities effective from 1 January 2018. Its benefit consists in the tax exemption of part of the income derived from intangible assets which are the result of the taxpayer’s own development activities.
Under the patent box regime, the taxpayer can exempt up to 50% of income (revenue) derived from:
- remuneration for granting the right to use registered patents, utility models and software which are the result of the taxpayer’s own development activities in Slovakia.
- the sale of products in the manufacture of which a patent or utility model has been used and which have been created by the taxpayer in the course of an activity carried out in Slovakia.
The patent box can be used by legal entities and permanent establishments taxed in the Slovak Republic.
Conditions for the application of the patent box regime:
- keeping obligatory records of the costs incurred (including activation costs) in the development of the invention, technical solution or software and of the costs of intangible results of research and development procured from another person which have been incurred in connection with the development of the invention, technical solution or software;
- intangible assets from which the income is derived are part of the taxpayer’s property;
- activation of costs on the development of patents, utility models or software;
- reduction of the exemption where the intangible assets were acquired in cooperation with another person.
Application of the exemption under the patent box regime
The tax benefit offered by the patent box regime is claimed by the taxpayer in his tax return for the tax periods in which he claims depreciation on the intangible asset.