IP BOX : the INPI Lyon’s morning sessions

As part of its program of “Intellectual Property” mornings, the INPI delegation in Lyon, in partnership with the Compagnie des Conseils en Propriété Industrielle (CNCPI) and the Lyon Bar, organized a training session dedicated to the operation of the so-called “IP Box” regime, a tax system favorable to the exploitation of industrial property assets resulting from a company’s R&D work.

A more precise focus was planned on its application to original software, a new feature of the 2019 finance law that has been somewhat overlooked until now.

Entirely dematerialized from Lyon, this conference on the IP Box and its consequences on the IP strategy of the company was dedicated to the key questions to ask before its option and especially to the calculation then process of realization leading to its operational application.

The conference was led by Nathalie FAYETTE, IP Lawyer and founder of MARK & LAW, and Richard JUAN, a tax attorney and partner at LAWREA, who specializes in the taxation of innovation.

And by the way, what is the IP Box?

Unfortunately not much used because it conveys without real justification an image of complexity and uncertainty, the IP BOX system allows companies to benefit from a tax rate limited to 10% on the income resulting from the exploitation of intellectual property rights, such as patents or original software. A great help to support investments in this field!

Nathalie FAYETTE started by defining the very notion of these rights; what is meant by original software? how to prove it? how to value it?
Me Richard JUAN then explained, illustrating it with different examples, the methods of calculation of the taxable income going from the determination of the concerned income, the calculation of the “Nexus ratio” and the consequences of the choice of the option date for the system.

A list of best practices also intended to enhance and secure the company’s IP assets

Finally, a synthesis of good practices allowing a structuring of R&D results and an increased legal security has been formalized by a single circular diagram explaining the different steps.

Although participants sometimes found it difficult to follow the calculations, the morning session visibly ended with a feeling of clarity in this system, which is considered complex.
Everyone was able to recognize that with a little anticipation and rigor, the application of this system had many advantages beyond the, already very interesting tax aspect, such as a gain in attractiveness when raising funds or a strengthening of the legal protection of the software.
The two presenters emphasized the precautions to be taken upstream to properly identify the assets, group them by family if necessary, value them through separate licenses and billing lines, time-stamp them and finally do not forget to draft the appropriate tax documentation.

“The duo presentation in webinar format allowed us to answer live questions from the participants, and to bring this remote animation to life” said Nathalie Fayette and Richard Juan.