Germany: Agreement with UK on IP regimes (BEPS) | KPMG | GLOBAL

Germany: Agreement with UK on preferential IP regimes (BEPS)

Germany: Agreement with UK on IP regimes (BEPS)

The governments of Germany and the United Kingdom agreed to a joint proposal to advance negotiations on new rules on preferential IP (intellectual property) regimes within the G20/OECD BEPS project.


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According to the UK government release (11 November 2014), the proposal is based on the “modified nexus approach” proposed by the OECD—i.e., an approach requiring tax benefits to be connected directly to R&D expenditures—but amends these rules to address concerns expressed by some countries and seeks to address outstanding issues in relation to qualifying the expenditures, and grandfathering and tracking qualifying R&D expenditures.

The proposal was developed through bilateral discussions between the two countries, seeking to achieve a balance between maintaining the countries’ ability to offer such IP regimes and preventing misuse of them.

The proposal seeks to achieve this through reinforcing the “nexus approach” so that substantial activity is undertaken in the jurisdiction offering the relief, while also better reflecting the commercial realities of R&D investment by business.

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