Patent Box Regime (Spain)

What is the Patent Box

Spain’s Patent Box regime allows companies to apply a 60% reduction to net income derived from licensing or transferring qualifying intangible assets. With the standard corporate tax rate of 25%, this means qualifying IP income is effectively taxed at just 10% — one of the most competitive rates in the OECD.

Qualifying assets

The regime applies to income from:

• Patents and utility models
• Supplementary protection certificates
• Registered designs and models
• Advanced registered software (not standard management software)
• Secret plans, formulas, or procedures with economic value

Excluded: trademarks, trade names, domain names, literary or artistic works, and generic know-how not linked to patentable technology.

Requirements and calculation

The taxpayer must have created the intangible asset (contributing at least 25% of its development cost). The reduction applies to net positive income (gross licensing revenue minus direct costs attributable to the asset). The OECD nexus approach may limit the reduction if substantial development was outsourced to related parties.

Compatibility with R&D deductions

The patent box is fully compatible with Spain’s R&D tax deductions under Article 35 LIS (25-42% for R&D activities, 12% for technological innovation). This creates a powerful double benefit: deductions on the cost side during development and a reduced tax rate on the revenue side during exploitation. Companies can also obtain a Informe Motivado Vinculante (binding motivated report) from the Ministry of Science to secure legal certainty on the R&D qualification.