Patent box: Canton Lucerne strengthens its profile as an attractive innovation hub
Thanks to the revision of the Tax Act 2025, companies in Lucerne can now also benefit from attractive conditions when using the patent box. A clear commitment to promoting innovation and a strong signal for the economy in the region.
The patent box was already introduced throughout Switzerland in 2020 as part of the STAF tax reform. However, when it was introduced, the canton of Lucerne set the patent box deduction very cautiously at 10%. This meant that Lucerne was not very competitive in an intercantonal comparison with regard to the patent box. This has now changed: The patent box deduction has been increased from 10% to 90%. At the same time, the relief cap has also been raised from 20% to 70%.
What is a patent box and what are the requirements?
The patent box is referred to as such because company profits generated by patented products or license income from patents are considered separately from other profits in a fictitious “box” and receive preferential tax treatment. The patent box has no influence on federal taxes, but can help to significantly reduce the cantonal tax burden.
In order to be able to set up a patent box, companies must hold at least one qualifying intellectual property right. In addition to Swiss and European patents, this also includes corresponding foreign patents (e.g. German patents). In addition, so-called comparable rights - i.e. supplementary protection certificates, protected semiconductor topographies, protected plant varieties, protected documents under the Therapeutic Products Act and protected reports under the Agriculture Act as well as corresponding foreign rights - are deemed to be qualifying intellectual property rights for the patent box.
However, other intellectual property rights such as trademarks, designs and copyrights do not qualify for the patent box. It should also be noted that only patents that have already been granted count as qualifying intellectual property rights, whereas patent applications do not.
What do patent box deduction and relief cap mean?
The patent box deduction describes the percentage by which the qualifying profits from patented products or license income are reduced when calculating tax. For example, if a company realizes a profit of CHF 100,000 through the licensing of a patent, with a patent box deduction of 90%, only CHF 10,000 of this amount is subjected to taxation at cantonal level. At the same time, however, the relief cap also applies. This sets a limit on the total of all tax deductions. This means that the total tax relief on all profits may not exceed the limit set by the relief cap. With a relief cap of 70%, which now also applies in Lucerne, a maximum of 70% on taxes can ideally be saved at cantonal level.
When is a patent box cost-effective and what else is to be considered?
As a guideline, it can be stated that the establishment of a patent box can be financially advantageous starting from a qualifying net profit of CHF 100,000 per year and can therefore also be very attractive for many SMEs. However, whether a patent box is actually viable depends on a number of influencing factors and should therefore always be assessed on an individual basis.
Factors to be taken into account include, for example, entry taxation and the nexus quotient. Companies that wish to set up a patent box must pay separate tax on the research and development expenses that were effectively deducted for tax purposes in the last ten previous tax periods. The proportion of research and development expenses incurred in Switzerland, known as the nexus quotient, also has a significant impact on the potential patent box deduction. In addition, setting up a patent box involves a certain amount of additional administrative and accounting effort to fulfill certain documentation obligations and should therefore ideally be accompanied by a person with appropriate tax law expertise.
In addition, the scope of protection of the underlying patent plays a decisive role in the profitability of a patent box. For the patent protection of new technologies, a filing strategy should therefore be developed that is aligned with optimal utilization of the patent box. The patent law firm Zander & Lenz will be happy to provide interested companies with further information on the subject of the patent box.
Author: Jonas Lenz, Swiss and European Patent Attorney
https://zanderlenz.ch/patentbox-im-kanton-luzern/
