Commentary

A4.441 Certain royalties etc where the usual place of abode of the owner is abroad

Administration and compliance

A4.441 Certain royalties etc where the usual place of abode of the owner is abroad

Other payments connected with intellectual property

A4.441 Certain royalties etc where the usual place of abode of the owner is abroad

Finance Act 2016 changed the rules on the deduction of income tax from payments of royalties to those whose usual place of abode is abroad and introduced a new definition of 'intellectual property'. The deduction of tax rules relating to royalties on intellectual property are now broadly aligned with the OECD Model Tax Convention definition of a royalty.

There are special rules for payments of cross border royalties where double taxation arrangements are in place (see A4.445), as well as payments of royalties to an associated company in an EU member state (see A4.450). Where the payment is an 'excepted payment' within the meaning of ITA 2007, ss 929–938 (Pt 15, Ch 11) (see A4.460), it may be made gross.

Circumstances under which there is a duty to deduct

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