The Second Generation of IP Box Regimes: Compliance, Substance, and Tax Competition under the Modified Nexus Approach
In response, the OECD’s 2015 BEPS Action 5 Final Report mandated the (MNA), effective from 2016 onwards. This created “IP Box 2.0”: a reformed regime where the tax benefit is strictly proportional to the taxpayer’s own qualifying R&D expenditures as a fraction of total R&D costs (including outsourced and acquired IP costs). The MNA is implemented through the OECD’s Harmful Tax Practices framework and peer reviews. ip box 2
[ \textQualifying Income = \textOverall IP Income \times \frac\textQualifying R&D Expenditure\textOverall R&D Expenditure ] The Second Generation of IP Box Regimes: Compliance,