Taxation of Intellectual Property Transactions

If a person or a company with intellectual property rights plans to receive income from their use or transfer of rights of use to third parties, then the issue of taxation arises. In order not to violate the tax legislation, it is necessary to conclude appropriate agreements and make sure that all tax liabilities are met.

You should also correctly calculate the taxes applicable to the disposal of intellectual property rights, depending on their type and peculiarities of use.

What kind of intellectual property is taxed?

The national legislation of different countries regulates the taxation of profits from transactions related to turnover:

  • literary, artistic or scientific texts;
  • sound tracks, television broadcasts, radio broadcasts, artistic performances;
  • various inventions;
  • scientific discoveries;
  • industrial designs;
  • trademarks, brands, productnamesandtheircommercialnames;
  • computer programs and other development in the IT field.

The size of the tax rate and liabilities to pay taxes are influenced by:

  • the nature of the intellectual property object;
  • the content of the agreement on the transfer of ownership for the object;
  • the countries where the parties to the agreement are residents;
  • the taxation systems of these countries.

There are a number of temporary preferential regimes and special conventions that govern the implementation of intellectual property rights at the international level. For example, in the UK, small businesses receive a 100% tax credit when purchasing software. Please be aware that there is also a tax on the sale of intellectual property.

Get a consultation

    The tax legislation changes quite often, therefore, for an accurate calculation of the tax rate, you should surely contact professionals. VigoLex lawyers constantly monitor the latest changes in the tax legislation, and have an extensive network of partners in different countries engaged in consulting on intellectual property and its taxation.

    VigoLex services in the field of taxation of intellectual property:

    • Analysis of legal relations between the client and the counterparty on licensing, alienation of property rights, payment of taxes, as well as determination of the amount of tax liabilities and the procedure for their repayment.
    • Checking tax liabilities in accordance with the IP documentation when working with non-resident counterparties.
    • Reviewing licensing agreements and other contract for compliance with all requirements related to taxation.
    • Providing advice on the issues related to taxation in the field of intellectual property.

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