EU-based digital media company generating €12M revenues across Germany, France, and Italy.
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A leading digital media group, operating across multiple EU countries, faced soaring corporate taxes as operations scaled internationally.
Fragmented IP ownership, non-strategic licensing models, and high statutory tax rates (~29%) threatened profitability.
Sovereign Partners designed a clean, globally compliant restructuring strategy.
We established a Luxembourg-based IP Holding Company , qualifying under Luxembourg’s 2018 IP Box Regime.
To secure eligibility:
- Only self-developed or properly acquired eligible IP (software copyrights) was transferred.
- Real substance was created:
Luxembourg-hired R&D and licensing personnel.
Active office presence and business licenses.
Documented R&D and commercialization operations within Luxembourg.
Using OECD-aligned transfer pricing documentation, operating companies across Germany, France, and Italy now license IP rights at arm’s-length royalty rates to the Luxembourg IP entity.
The result:
- €5M+ in annual profits were shifted legally to a 5.2% tax environment.
- The group’s global effective tax rate dropped from 29% to approximately 18%.
- Over €1.2M was saved annually — fully compliant under BEPS Action 5 and Luxembourg Circular LIR 50bis/1.
This case study shows how Sovereign Partners engineers full-spectrum, internationally compliant tax strategies — not gimmicks, but real scalable solutions.
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