Switzerland citizens voted for the Federal Act on Tax Reform and AHV Financing (TRAF) in the referendum of 19 May 2019. In compliance with OECD recommendations for international taxation, the new tax system, to be implemented by the cantons as early as in 2020, will develop new tax-related special arrangements to promote research and development (R&D), and in particular the patent box mechanism that will allow a portion of the profits from inventions to be taxed at a reduced rate.
Companies as well as independent developers holding patent rights issued from Switzerland R&D (according to the OECD rules) will be eligible to the tax reduction.
Which rights qualify for the patent box?
Domestic and foreign patents and similar rights should qualify for the Swiss patent box. The term “similar rights” includes, in particular, supplementary protection certificates, protected research results and the corresponding foreign rights. Software which is part of an invention can also be patented in Switzerland (“computer-implemented invention”). This is the case when it serves a technical application, e.g. when it controls industrial processes as part of a device, technologically improves data transfer or data storage, increases a computer system’s security or makes a computer system easier to use (human-machine interface). These patents likewise qualify for the patent box.
Source: Federal Department of Finance Q&A, May 2019
Our IP Partners experts are available for a quick, cost-effective audit of your assets (incl. machinery, software, processes…) to help you determine your individual patent-box opportunities in partnership with your fiduciary, so that you are ready for the tax changes as early as in 2020-2021, in particular in cantons where the patent box will be subject to a significant reduction rate – this is particularly applicable to companies and independents with original products which are commercially registered with R&D staff operating in Fribourg (subject to the June 30 cantonal votation), Valais, and/or possibly Vaud (still to be determined as the time of writing this note). Depending on the international export opportunities as well as national licensing and divestment strategies for your innovations, a number of patenting options are available at a reasonable cost and time-to-grant. Do not hesitate to contact us for more information!