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(Un)Intended Effects of Preferential Tax Regimes: The Case of European Patent Boxes

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Working Paper
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In this analysis of the effects of the preferential tax treatment of IP income in European countries, authors provide a comparison of pre-tax profits of firms in patent box countries – before and after the introduction of patent boxes – and provide the comparison for two types of firms: affiliates that belong to a MNE and those that belong to domestic conglomerates. Contrary to expectation, the overall tax base adjustment might lower tax revenues collected from MNEs.