В статье рассматриваются вопросы, связанные с налогообложением трансграничных (международных) операций по уплате роялти. Особенное внимание уделяется определению понятия “роялти”. Значительный интерес привлекает обзор ставок налога на роялти в популярных для налогового планирования юрисдикциях: Кипр, Германия, Нидерланды, Австрия, Великобритания. Особое внимание автор уделяет украинскому праву, в частности, понятию бенефициарного собственника.
The increasing importance of intellectual property rights and the licensing of technology in modern business raise potential cross-border tax questions as well as tax planning opportunities for multinational groups. For example, multinational groups involved in technological, scientific and pharmaceutical businesses may seek to generate licensing income from such rights in low-tax jurisdictions to minimize tax burden.
Properly characterizing licensing income in cross-border transactions is necessary for determining the appropriate taxation of such licensing income. In general royalty income is treated differently from income derived from sales, so thorough analysis is needed to determine whether or not each particular payment is classified as a royalty. To illustrate, licensing payments related to computer software may be treated as royalty or as payment for services or lease of computer software and will, accordingly, be treated differently.
This article focuses on the taxation of cross-border transactions and does not develop these issues relating to the deductibility of royalty payments for corporate profit tax purposes.
Definition of royalty
In accordance with Ukrainian legislation, a royalty — for taxation purposes — is defined as follows: “payments of any kind received as a consideration for the use of or the right to use any copyright of literary, artistic or scientific works, including software, other records on the media carriers, video- or audio-cassettes, cinematography films or tapes for radio or television broadcasting; for acquisition of any patent, registered trademark, design, secret drawing, model, formula, process, the right to information concerning industrial, commercial or scientific experience (know-how).”
The following payments shall not be considered as royalty:
— received as consideration for the use of a computer program, if the conditions of use are limited to functional purpose of the program and its reproduction is limited by the number of copies required for such use (use by the “end user”);
— received for purchasing copies of intellectual property embodied in electronic format for use by its functional purpose for final consumption;
— received for the purchase of things (including the media), which implemented or contained intellectual property rights defined above, for the use, possession and/or disposal by the person; and
— payments for obtaining intellectual property described above in possession, at disposal or in ownership or where conditions of use entitle the user to sell, or dispose otherwise of such intellectual property, or disclose secret drawings, models, formulae, rights to information concerning industrial, commercial or scientific experience (know-how) except where such disclosure is mandatory under Ukrainian legislation.
The above definition of royalty (new wording) was introduced by the Act on Amendments to the Tax Code of Ukraine and some other Acts of Ukraine on Tax Reform No.71-VIII of 28 December 2014 (hereinafter — Act No.71). Act No.71 came into force on 1 January 2015.
It is noteworthy that, according to the Commentary to the OECD Model Tax Convention, payments for the use of software in own businesses, are not treated as royalties. Rather, the royalty will arise if the transferee acquires partial rights in the copyright, such as to reproduce and distribute public copies of the program.
Through the changes introduced by Act No.71, the legislator tried to focus on royalties related to software contracts and distinguished software contract revenue streams between royalties, payment for services or lease of computer software. This means that all licensing agreements must be reviewed to identify which payments are now not treated as royalties. Otherwise, such facts will be thoroughly monitored during tax audits. To note, the practice of application of the new definition of royalty is not yet available. Thus, there might be different interpretations by different tax inspectors during tax audits.
Withholding tax
Royalties qualify as a Ukrainian sourced income that attracts 15% withholding tax during payment to a non-resident licensor, unless otherwise provided by the relevant double taxation treaty. The tax should be collected by the Ukrainian income payer (licensee) from the amount of income payment and remitted to the state.
If a non-resident recipient of income (licensor) is eligible for a reduction of or an exemption from the Ukrainian withholding tax in accordance with the terms of an applicable tax treaty, such reduction or exemption would be granted if the non-resident has supplied the Ukrainian payer with a valid certificate, issued by the competent tax authorities in the non-resident’s country, confirming the tax residency status of the non-resident (Tax Residency Certificate) and, accordingly, its entitlement to the benefits of the taxation treaty. Such Tax Residency Certificate has to be appostilled, translated into Ukrainian and such translation shall be certified by the notary.
Below is a table with withholding tax rates applicable to royalties for the most popular jurisdictions.
Cyprus
— 5% — for the rights for use of the following objects: copyright to scientific works, patents, trademarks, secret formulas, processes, information concerning industrial, commercial or scientific experience (know-how);
— 10% — for the rights for use of the following objects: literary works, artistic work, cinematograph films, films or tapes for television and radio broadcasting, computer software; use/right to use industrial, commercial or scientific equipment.
Germany
— 0% — for the use of, or the right to use the following objects: any copyright of scientific work, patent, trademark, design or model, plan, secret formula or process, or for information regarding industrial, commercial or scientific experience;
— 5% — for the use of, or the right to the use of the following objects: any copyright of literary or artistic work including cinematograph films and films or tapes for radio or television broadcasting.
The Netherlands
— 0% — for the use of, or the right to the use of the following objects: any copyright of scientific work, any patent, trade mark, design or model, plan, secret formula or process, or for information regarding industrial, commercial or scientific experience;
— 5% — for the use of, or the right to the use the following objects: any copyright of scientific work, (including cinematograph film and films or tapes for radio or television broadcasting).
Austria
— 0% — for the rights for the use of the following objects: any copyright of scientific work, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience;
— 5% — for the rights for the use of the following objects: any copyright of literary or artistic work including cinematograph films, and films or tapes for radio or television broadcasting.
| Country | Withholding tax rate |
|---|---|
| Cyprus | 5/10% |
| Germany | 0/5% |
| The Netherlands | 0/10% |
| United Kingdom | 0% |
| Austria | 0/5% |
Beneficial owner
The Tax Code of Ukraine further provides that the respective tax treaty applies (thus, lower withholding tax rates) only in case the recipient of Ukrainian sourced income is the beneficial owner of such income.
Even if the recipient of income has the rights to receive such income, it would not be treated as the beneficial owner in case such recipient of income is a nominee shareholder, agent or is an intermediary with respect to such income.
Ukrainian legislation does not define the term “beneficial owner” and does not provide for either mandatory documentary proof of such status or a list of documents which can certify “beneficial owner” status of the recipient of income from Ukrainian sources.
However, in its letter No.3917/5/ 12-0216 of 30 March 2011, the State Tax Administration of Ukraine stated that “beneficial owner” status needs to be documentarily proved.
The Ukrainian court practice with respect to “beneficial owner” criteria is only developing, and it is difficult to predict what position will be taken by the Highest Administrative Court. By way of example, in the Decision of the Kharkov District Administrative Court of 24 December 2013 (case No.829/9359/13-a), the court supported the right of the taxpayer to apply provisions of the respective DTT with respect to a royalty payment under a sub-license agreement on the basis of the following documents confirming “beneficial owner” status of recipient of royalty: 1) Tax residency certificate of the company — actual owner of the trademark stating that such company did not receive royalty from licensee (sub-licensor) during the periods in question; 2) official letter issued by licensee (sub-licensor) stating that licensee (sub-licensor) is the beneficial owner with respect to royalty payment received under sub-license agreement and confirmation that the licensee (sub-licensor) is not an agent or nominee with respect to such royalty.
Автор: Viktoriia Y. Fomenko
Источник: http://www.ujbl.info/article.php?id=571