EU halts probe of tax breaks for drug and technology patents
THE European Union (EU) will not pursue a probe of national programmes that create tax breaks for research and development, giving a boost to drug and technology companies that generate revenue from patents.
The EU’s hands were tied by a 2008 decision to approve a “patent box” tax break in Spain, said Gert-Jan Koopman, the European Commission official in charge of the unit overseeing several tax probes.
The 2008 decision gave companies “legitimate expectations” that such programmes were legal, said Mr Koopman, the commission’s deputy director-general for state aid.
Patent boxes are one of several tax-avoidance tools that came under scrutiny as the EU cracked down on divergent revenue schemes throughout the bloc. The EU is already probing specific deals stuck by Amazon, Apple and Starbucks in three EU countries.
An agreement reached last year by EU governments in the Council of the EU to limit tax breaks on patented inventions persuaded the commission to stand down.
The goal is to ensure that governments do not offer tax breaks that require no substantive work on developing the intellectual property.
Several nations, including the UK, use patent boxes to lure companies to open research facilities in the country, which often bring high-level jobs for scientists, programmers and doctors.
GlaxoSmithKline in 2012 cited the UK policy for its plans to invest about £350m in a new drug-ingredients plant in England.
Several other companies have touted the benefits of the UK patent box. ARM Holdings, the chip designer whose products power more than 95% of smartphones, said it expected its tax rate to decrease due to the incentive, according to investor slides issued last year.
• Sharp, the Osaka, Japan-based maker of consumer and industrial electronics, and India’s Sharp Industries have been urged to discuss settlement of their trademark dispute, India’s Business Standard reported.
At issue is the Indian company’s use of “Sharp No 1” with pumps it sells domestically and for export, according to the Business Standard. Although India’s Intellectual Property Appellate Board has set the dispute for hearing at the end of next month, it has also recommended that the companies engage in settlement discussions first.
Counsel for the Indian company told the board that Sharp Industries did not have any plans to compete with the Japanese electronics firm, the Business Standard reported.
• Aston Martin Lagonda, the UK manufacturer of the luxury car identified with James Bond, sued one of its suppliers, saying it made unauthorised use of the car maker’s confidential information, trade publication Global Manufacturing reported.
Envisage Group of Coventry is accused of using Aston Martin’s confidential vehicle design data files as a source of design elements in its custom-order luxury cars.
In its court papers, Aston Martin said it had protected the confidential information by requiring all Envisage employees who entered its facilities to sign nondisclosure agreements, Global Manufacturing said.
