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Taxation and the transfer of patents: Evidence from Europe

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  • Ciaramella, Laurie

Abstract

I study how taxes affect firms’ incentives to shift the location of intangible assets. Using firm-level data on patent reassignments, I exploit variations in statutory tax rates and the introduction of “patent box” policies as shocks modifying incentives to transfer patents across countries. The results suggest a large impact of taxes on asset shifting between affiliates, increasing with expected patent income, and driven by very large firms. Patent boxes are persistently associated with more incoming and less outgoing patent relocations between affiliates. These findings suggest that taxes provide firms with incentives to shift income via patent relocation, and advocate for considering patent transfer strategies in tax policy.

Suggested Citation

  • Ciaramella, Laurie, 2023. "Taxation and the transfer of patents: Evidence from Europe," European Economic Review, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:eecrev:v:151:y:2023:i:c:s0014292122001921
    DOI: 10.1016/j.euroecorev.2022.104312
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    More about this item

    Keywords

    Corporate tax; Patent box; Intellectual property; Patent ownership; Patent transfer; Markets for technology;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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