PPI - Radically Pragmatic
  • Donate
Skip to content
  • Home
  • About
    • About Us
    • Locations
    • Careers
  • People
  • Projects
  • Our Work
  • Events
  • Donate

Our Work

Should the United States Adopt an Innovation Box?: The Post-BEPS Landscape

  • October 9, 2015
  • Michael Mandel
  • Michelle Di Ionno
Download PDF

This policy brief examines the positives and negatives of the patent/IP/ innovation box. This issue is increasingly relevant given the OECD’s recent release of new principles governing the global tax system.

On October 5, the OECD released the final reports of their Base Erosion and Profit Sharing (BEPS) Project. The comprehensive recommendations in the reports are designed to force multinationals to pay more taxes by substantially eliminating many of the tax avoidance strategies they currently use.

However, the BEPS reports do effectively bless one way to reduce taxes—the granting of tax incentives for innovation and R&D-related activities. As one BEPS report says:

“…it is recognized that IP-intensive industries are a key driver of growth and employment and that countries are free to provide tax incentives for re-search and development (R&D) activities, provided that they are granted according to the principle agreed by the [BEPS Report].”

In broad terms, there are two types of innovation-related tax incentives: R&D tax credits, and patent/IP/innovation boxes. The first provides a credit for R&D spending, whether or not it results in a useful product. The second provides for a lower rate on corporate profits that arise from innovation-related investment. In other words, the patent/IP/innovation boxes favor those companies who are successful with their innovation.

The terminology difference between a patent box, an IP box, and an innovation box reflects the breadth of the intangibles covered, ranging from simply patents, to other types of intellectual property such as copyrights, or a broader range of spending related to innovation. The OECD uses the technical term ‘IP regime’ to cover all three.

Download “2015.10-Mandel-Di-Ionno_Should-the-US-Adopt-an-Innovation-Box_The-Post-BEPS-Landscape”

Related Work

In the News  |  July 7, 2025

Ritz on NewsNation: How Trump’s BBB Adds to the National Debt

  • Ben Ritz
Budget Breakdown  |  July 3, 2025

Passage of ‘One Big Beautiful Bill’ Renders Republican Deficit Hawks Extinct

  • Ben Ritz Alex Kilander
Blog  |  July 2, 2025

Senate Republicans Go Nuclear to Blow Up the National Debt

  • Ben Ritz
Budget Breakdown  |  June 26, 2025

GOP’s “Big Beautiful Bill” Would Undermine Economic Stability

  • Ben Ritz Alex Kilander Nate Morris
Blog  |  June 26, 2025

“Trump Accounts” Are a Promising Start, But Flaws Remain

  • Alex Kilander
Op-Ed  |  June 18, 2025

Weinstein Jr. for Forbes: It’s The Early 1990s Bond Market Again

  • Paul Weinstein Jr.
  • Never miss an update:

  • Subscribe to our newsletter
PPI Logo
  • Twitter
  • LinkedIn
  • Facebook
  • Donate
  • Careers
  • © 2025 Progressive Policy Institute. All Rights Reserved.
  • |
  • Privacy Policy
  • |
  • Privacy Settings