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Cross-border royalties are all about withholding tax (WHT).
Cross-Border Royalties
What do you need to look out for when your client pays cross-border royalties to an entity overseas?
This is the question Clint Harding and Alexander Rasmussen of Arnold Block Leibler in Sydney will discuss with you in this episode.
Here is what we learned but please listen in since Clint Harding and Alexander Rasmussen explain this much better than we ever could.
To listen while you drive, walk or work, just access the episode through a free podcast app on your mobile phone.
Cross-Border Royalties
Royalties are for the right to use an asset. And it is often intellectual property. Think of copyrights, patents, trademarks, expertise, processes, mining rights etc.
Franchise Fees
A franchise fee on the other hand can be a royalty payment, but it doesn’t have to be. For a franchise fee you have to ask what the fee actually covers. Is it for the right to use something? Or is it for interest? Or is a capital payment. What is it?
Based on the answer you treat that payment accordingly. So for example if it is a capital payment for WHT purposes, then you don’t need to worry about withholding tax. If it is a royalty, you withhold 5%. And if it is interest you withhold 10%. But always check the relevant DTA.
This is just a very short summary. Please listen in as Clint Harding goes into a lot more detail. There is a lot more to the issue than we have listed here.
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Disclaimer: Tax Talks does not provide financial or tax advice. All information on Tax Talks is of a general nature only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.
Last Updated on 15 November 2021
Tax Talks spoke to Clint Harding - Tax Partner at Arnold Bloch Leibler - for more details.
