Encouraged by the UK government's proposal to lower corporation tax of profits from patents, global pharmaceutical giant GlaxoSmithKline Plc (GSK) said yesterday that it would invest £500 million ($800 million) in new manufacturing projects in the country.
The government's proposal termed as a 'patent box' is designed to stimulate investment in R&D and related manufacturing in the UK by introducing a lower rate of corporation tax on profits generated from UK-owned intellectual property.
Chancellor George Osborne unveiled new tax reforms on Monday to attract international investment in the UK, telling that the amendments are intended to change the "outdated and complex rules for controlled foreign companies". The proposed 'patent box' is part of the new measures.
By introducing the scheme in April 2013, a 10-per cent corporation tax on profits from patents, the UK government intends to create the right environment for innovative companies to prosper in the country by attracting downstream economic activity in development and manufacturing, and associated employment.
Earlier in the June budget, the government announced a 4-per cent cut in the corporation tax for businesses to 24 per cent over the next 4 years.
GSK CEO Andrew Witty said, ''The introduction of the 'patent box' is a bold and forward-thinking measure which builds on the UK's strength as a global centre of excellence for science and R&D.''