This paper assesses the spillover effect of European Patent Boxes on affiliates of MNEs operating in Austria and Germany. I divide firms in a control and treatment group, the latter having affiliates in countries where preferential regimes for patent and other IP income have been introduced between 2005-2011. My findings suggest that Austrian and German firms, which have gained indirect access to preferential IP regimes via their affiliates, reduce their reported profit levels. I do not observe, however, an effect on the level of intangible assets owned by these firms. (author's abstract) / Series: WU International Taxation Research Paper Series