Corporate Coalition Pushes For US Patent Box
American Innovation Matters (AIM), a coalition of companies that includes Cisco, Boeing, Intel, Oracle and Facebook, has released a statement pushing for the introduction of a US patent box, or an “innovation box” as it is known in the United States.
The statement looks at the endorsement on November 16 by Group of Twenty (G-20) leaders of the overhaul to international tax rules developed by the OECD, and confirms that it will result in many US companies facing “new pressures to relocate key investments and jobs unless Congress takes swift action to reform the US approach to international taxation.”
“The die has been cast, and the United States stands to lose major corporate investments and tax revenue unless the US Congress addresses international tax reform,” said Lisa Camooso Miller, AIM’s spokesperson. “Other countries are luring American companies with tax policies like an innovation box that provide lower tax rates for income earned from intellectual property. The United States needs a competitive tax code or we will fall behind.”
AIM notes that, while many countries such as the United Kingdom and France have adopted innovation box policies, the changes endorsed by the G-20 leadership would create new restrictions that could lead companies to relocating important research and development (R&D) investments.
The changes introduced by the OECD’s Base Erosion and Profit Shifting initiative, it explains, would require companies using a country’s innovation box to locate their R&D investments and jobs locally.
AIM points out that tax rates under an innovation box are typically between 5 and 15 percent, compared with the US corporate tax rate (without an innovation box) of 35 percent. A discussion draft put forward earlier this year by Charles Boustany (R – South Louisiana) and Richard Neal (D – Massachusetts), senior members of the House of Representatives Ways and Means Committee, proposed an innovation box with a tax rate of 10 percent.
