Recently I learned of the tremendous tax treat the country of Luxembourg offers companies involved in domain names.
I figured If I didn’t know about it, a lot of you may not know about it as well.
Its one of the few countries that have a special tax incentive program for Intellectual Property and specifically domains.
Its starts with a tax rate of a ridiculously low 5.7% .
Moreover you the law provides an exemption of 80% of the net positive income from the use or the right to use certain IP right, an Exemption of 80% of the net capital gain realised upon disposal of qualifying IP and 100% exemption from net wealth (estate tax) tax on qualifying IP rights
Finally domain names themselves are amortizable over 5 years instead of 15 years in the US.
You should note that some countries such as Germany do not allow domains to be amortized over any period.
Needless to say anyone considering a move need to talk to excellent counsel, accountants and the rest.
Recently NameDrive relocated to Luxembourg and another Key Systems opened an office there.
With such great tax treatment I wouldn’t be surprised to see other companies in the space located around the globe to move to Luxembourg to take advantage or even some new gTLD operators.