Introduction Background Note
261.The new Patent Box regime will allow companies to elect to apply a 10 per cent rate of corporation tax, starting from 1 April 2013 on a progressively incremental basis with the full rate applying from 1 April 2017, to all profits attributable to qualifying patents, and certain other IP rights.
262.The regime will also apply to other qualifying intellectual property rights such as regulatory data protection (also called data exclusivity), supplementary protection certificates and plant variety rights.
263.Other non-qualifying profits in these companies will continue to be taxed at the main rate of corporation tax.
264.The Patent Box regime will potentially benefit a wide range of companies which receive royalties in respect of qualifying IP rights, sell products, or use patented processes as part of their business.
265.Two consultation documents have been published:
	November 2010: The Taxation of Innovation and Intellectual Property.  This sets out the high level principles for the Patent Box design and;
	June 2011: Consultation on the Patent Box.  This is the Stage 2 consultation document which gives more detail on the design proposals.
266.A consultation response document was published in December 2011, along with a Technical Note and Guide to the Draft Legislation.  An updated Technical Note and Guide to the Legislation is being published in March 2012 which reflects the changes made to the draft legislation since December 2011.