“Patent Box” Tax Incentive (Leaflet)
To encourage the industrial and R&D sectors, creative industries and IP users to engage in more IP trading activities, the Government has implemented the “patent box” tax incentive. The tax rate for assessable profits from eligible IP income derived from eligible IPs (i.e. patents, plant variety rights and copyright subsisting in software) has been reduced from 16.5% to 5%.
The relevant legislation has come into effect on 5 July 2024.
If the profits are derived from a non-Hong Kong patent with a date of filing on or after 5 July 2026, the underlying invention of such patent must be protected by a Hong Kong original grant patent or short-term patent that has undergone substantive examination, so as to fulfil the local registration requirement under the “patent box” regime.
If the profits are derived from a Hong Kong patent with a date of filing on or after 5 July 2026, such patent must be a Hong Kong original grant patent or short-term patent that has undergone substantive examination.