Leaving arguments about new patch releases out, how could we practically track this? Would every engineer log the time they work and track feature work separately from bug fixes?

I see that you are blessed to work in an environment where your day is not a stream of Jira tickets linked to timesheets.

I do spent a lot of time in Jira and my teams do work out of Jira backlogs, but we don't have time tracking.

There are already tax credits available to "new development" that doesn't include fixes.

So this isn't a new thing to track

It's a bit strained, but car or TV companies often put out a new model that's identical to the old model +- some but fixes. There's a line somewhere but the law does not specify the line, it seems

Exactly. v4.2.34 is a new product compared to v4.2.33.

Not defending this, but in the eyes of the law there's no distinction between new products and features and bug fixes.

Precisely. The difference with software is that the production process is so iterative that experimentation becomes a relatively rational tactic for getting things done.

Announcement: New Product v2.0 Features Less Bugs!!!