IPrime Anwaltskanzlei Zürich Balmer Etienne Treuhand
The Swiss Patent-Box

The patent box in Switzerland

Companies with R&D units or owning patents can make use of and benefit from the Swiss patent box

The Swiss patent box offers companies subject to Swiss taxes an attractive option within the local research site. Research and development costs as well as income from Swiss or foreign patents enjoy privileged tax treatment.

Companies domiciled in Switzerland now have the opportunity to benefit from tax advantages in connection with the so-called patent box or with taxes on R&D expenses. According to the Federal Council's press release of 14 June 2019, the corresponding law will enter into force on 1 January 2020.

What is at the core of the Swiss patent box: Upon a taxable person's or company's request, the net profit resulting from patents or income from patents, respectively, is taken into account in the ratio of qualifying R&D expenses to total R&D expenses per patent for the calculation of the taxable net profit. This may result in a reduction in income of up to 90%, entailing corresponding tax advantages. In order for patents to be taken into consideration for the box, they must relate to research and development activities (nexus approach) and, in accordance with OECD guidelines, they must be novel, useful and non-obvious.

Additionally, up to 150% of the explicit commercially justified R&D expenses incurred, directly or indirecty via third parites, by a taxable person or company in Switzerland may be deemed deductible. In Switzerland, the competence lies with the cantons, which may grant their approval upon request.

Who is eligible to the patent box: This regulation favours not only large companies, but also the numerous small and medium-sized enterprises in Switzerland (SMEs) operating in research, development and innovation.

Background: On 19 May 2019, Swiss voters endorsed the new Federal Act on Tax Reform (TP17/TRAF). It is a comprehensive tax package designed to promote and safeguard the competitiveness and sustainable employment in Switzerland. It aims at strengthening Switzerland's position as a business location in line with the OECD guidelines. One key element of the new tax regime is the possibility of a patent box (formerly also referred to as licence box) for companies with research and development units (R&D) and in particular also for companies holding patents as industrial property rights (intellectual property). In addition to patents, the patent box also covers so-called "similar rights" (supplementary protection certificates, topography rights, plant varieties, documents protected under the Therapeutic Products Act of 15 December 2000 and namely also foreign rights).

IPrime Rentsch Kaelin Ltd (patent attorneys and attorneys at law) and Balmer-Etienne (trust, audit and taxes) provide companies with specialised and tailor-made advice on the implementation of a Swiss patent box, on strategic questions regarding the promotion of the business location as well as on tax and patent law aspects.

Stefan Wigger
MLaw, Swiss Certified Tax Expert
CAS UZH in International Tax Law
Partner, Member of the Executive Board
Head of Tax and Legal
+41 41 228 11 11
stefan.wigger@balmer-etienne.ch

SW

Rudolf A. Rentsch
Dr. iur., M.A. HSG et MSc EE ETH
Attorney at Law and Swiss Patent Attorney
Chairman of the BoD, Partner
+41 44 229 60 60
rudolf.rentsch@iprime.law

RR


Kevin Röllin
MLaw, Swiss Certified Tax Expert
Manager
+41 41 228 11 11
kevin.roellin@balmer-etienne.ch

Moritz A. Kälin
Dr. sc. nat. ETH, MSc Chem.
European and Swiss Patent Attorney
Member of the BoD, Partner
+41 44 229 60 60
moritz.kaelin@iprime.law