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a favorable regime which provides for an effective tax rate as low as 5.84%
When seeking an ideal location for intellectual property management a safe environment is of vital importance. For this reason the fact that Luxembourg has signed the Bern Convention, the Madrid Agreement and Protocol, the Paris Convention, as well as the Patent Cooperation Treaty, besides having implemented European directives and treaties in this respect, constitutes Luxembourg as a safe environment for Intellectual Property.
However, this is not the only reason why Luxembourg has become a center for Intellectual Property. Luxembourg has implemented an IP tax regime which provides for very competitive tax rates applicable to a broad range of IP income. With the law of December 21, 2007 an 80% exemption on income derived from certain categories of Intellectual Property rights, as well as, capital gains realized on the sale of such rights was introduced.
Patents, trademarks, copyrights on software, internet domain names, designs and models are among the IP rights which benefit from this favorable regime which provides for an effective tax rate as low as 5.84%.
Besides this advantageous IP tax regime, Luxembourg tax resident companies benefit from the double tax treaties concluded by Luxembourg and the EU directives which can reduce or even eliminate foreign withholding taxes borne on the royalties accumulated.
For further information please contact Artemis Papatheodorou.
T: + 30 210 6753856