Commentary

B5.332 Patent royalty payments

Business tax
Business tax | Commentary

B5.332 Patent royalty payments

Business tax | Commentary

B5.332 Patent royalty payments

ITA 2007 completely changed the rules governing deduction of tax from annual payments and patent royalties.

A payment of patent royalties must be paid under deduction of income tax at the basic rate for the tax year in which it is paid in the following circumstances:

A. By an individual making the payment1 for genuine commercial reasons in connection with a trade, profession or vocation2.

B. By a person other than an individual (whether or not in connection with a trade etc); this does not apply to a payment by personal representatives of an individual if the payment would

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