The OBI, the exclusive authority responsible for the protection of inventions, trademarks, and industrial designs, continues to reform and modernize the legal framework regarding the taxation of businesses that use Patents in their production.
With Article 37 of Law 5162/2024 “Measures for Enhancing Income, Tax Incentives for Innovation and Business Transformations, and Other Provisions,” significant improvements are introduced to the patent incentives provided under the Income Tax Code (Law 4172/2013). These changes aim to further strengthen innovation and research activities of businesses in Greece.
Specifically, in paragraph 1 of Article 71A of the Income Tax Code, the following modifications are made:
- Change of the application period for the tax exemption: Profits from the exploitation of internationally recognized patents are now exempt from income tax for three (3) consecutive tax years, starting from the year in which the related profits are first realized.
- New incentive for the following seven (7) years: Profits from the exploitation of patents will be exempt from the income tax by 10% for the next seven consecutive years.
Under the current regulation, there is a full exemption from taxation on profits derived from the exploitation of patents for the first three years. This exemption is supplemented by an additional 10% tax exemption on profits from the exploitation of patents for the following seven (7) years.
This new regulation, which will come into effect from the tax year 2025, extends patent incentives, offering full exemption from income tax on profits from patent exploitation for three (3) consecutive tax years. Furthermore, for the next seven (7) years, businesses will benefit from a 10% exemption on these profits, provided they are linked to research and development expenses.
