IP box Active
No IP Box — Lizenzschranke (§4j EStG)
Germany has no patent box or innovation box — IP income is taxed at the full corporate rate (~30% incl. trade tax). The Lizenzschranke (§4j EStG, since 2018) additionally restricts deductibility of royalties paid into foreign preferential IP regimes. This is an anti-IP-box positioning, not merely an absence.
✓ 3 Jul 2026
ℹ Documents an absence — shown so comparisons stay honest, not to suggest a benefit.
Key parameters
| IP box available | No |
|---|---|
| Effective rate on IP income | ~30% (full corporate rate incl. trade tax) |
| Lizenzschranke | Royalty deduction restriction since 2018 Targets royalties paid into non-nexus-conform foreign preferential regimes |
Eligibility
- HQ
- Any headquarters country
- Local presence
- No local presence required for this point This specific point does not depend on how you are present locally.
- R&D substance
- Not required
- Company size
- No size restriction
- Models
- All
- Sectors
- All
- Goals
- IP domiciliation; Additional design site in Europe
Relevant as a structuring constraint: domiciling IP in Germany yields no preferential rate, and cross-border royalty flows into IP boxes elsewhere may hit the Lizenzschranke.
Mechanism & application
Rule-based entitlement — Legal entitlement — self-assessment, no case-by-case funding decision.
Not applicable — this entry documents the absence of an instrument and a restriction to be aware of when structuring IP holdings.
Timeline: n/a
Legal basis & sources
- Legal basis
- §4j EStG (Lizenzschranke); no IP box provision exists in German tax law
- Verification
- EStG consolidated text
from 1 Jan 2018 until no expiry review 1 Jan 2027