Over the past few years, major global companies in various sectors have transferred unprecedented number of patents to tax havens dispersed throughout the world.
The NPEs have also joined the mass transfer of patents to tax havens, rapidly overtaking the number of patent transfers by major global companies. It appears that such mass transfer of patents is becoming a new business trend that is not likely to go away anytime soon. We tracked closely the patent assignment movement by patent holders from as early as 2000 and analyzed the assignment trend by location, assignors and assignees. Through this process, we have made the following key findings
Remarkable number of patents are transferred to tax havens.
Since the start of the patent assignment movement, most traffic of patent transfers occurred in the last five years. This rush of assigning patents to business entities located in tax havens gave rise to new tax havens stars. Cayman Islands, Luxembourg and Virgin Islands are receiving the most spotlight.
The reason for patent assignment is clear— favorable tax treatment.
According to a study by Deloitte, most of tax haven countries, including, but not limited to, Cayman Islands, Luxembourg, Bermuda, the Virgin Islands, Liechtenstein, the Bahamas and Gibraltar impose no tax on royalty-related income nor on interest-related income. Panama is a small exception, with 13% tax rate on both incomes related to royalty and interest. For a quick contrast, the US imposes a 30% tax on both types of incomes.
There are 25 big assignors, coming from diverse sectors.
Our study have spotted 25 major players in the patent transfer movement, who have assigned more than 75 patents to business entities located in tax havens since 2001. Advanced Micro Design(AMD), Delphi Automotive Systems, Micron Technology, NEC and Hon hai Precision Industry have made the top five on the list.