IP Box
A preferential tax regime allowing companies to pay a reduced rate (10% in France since 2019) on net income derived from eligible intellectual property: patents, copyrighted software, plant variety certificates. The election is made annually on the corporate tax return.
In practice
In France, the IP Box applies to the share of net profit attributable to the qualifying IP asset, calculated via a nexus ratio based on the company’s own R&D spending. A software publisher that invested 400,000 euros in internal R&D and generates 1 million euros in net licence income can typically apply the 10% rate to 60-70% of that income instead of the standard 25%. The regime stacks with the CIR research tax credit, but CIR-deducted expenses reduce the nexus ratio, so multi-year modelling is essential.