Are trademark usage fees deductible before tax?
No. According to Article 49 of the Implementation Regulations of the Enterprise Income Tax Law, royalties paid between business units within an enterprise shall not be deducted before tax.
Since the "Enterprise Income Tax Law" and its implementing regulations came into operation , many taxpayers inquire whether subsidiaries should pay fees for using the parent company's trademark and branches using the parent company's trademark, and whether the trademark usage fees paid can be deducted before tax. Taxpayers are hereby reminded to note that the tax treatment of trademark usage fees paid by a subsidiary using the trademark of the parent company is different from that of a branch using the trademark of the head office.
First of all, it is necessary to clarify what a trademark usage fee is. Trademark usage fees are one of the royalties. Article 20 of the "Regulations on the Implementation of the Enterprise Income Tax Law" has a clear definition. It refers to the income obtained by an enterprise from providing the right to use trademark rights and should be paid to the user of the commodity rights as stipulated in the contract. Realization of revenue is recognized on the date on which merchandise rights royalties are paid. Trademark right is a legal right of a single nature, also known as,It refers to the non-other rights of the owner of a registered trademark according to law to control its registered trademark and prohibit others from infringing upon it, including the trademark owner’s exclusive right to use its registered trademark, income rights, disposal rights, renewal rights and the right to prohibit others from infringing. rights etc.
Secondly, it is necessary to clarify whether trademark use can be deducted before tax. According to Article 49 of the Implementation Regulations of the Enterprise Income Tax Law, royalties paid between business units within an enterprise shall not be deducted before tax. Since the Enterprise Income Tax Law adopts corporate income tax, enterprise branches are part of the enterprise's head office and are not an independent entity. They cannot become independent corporate income tax taxpayers. They should be consolidated and paid by a unified representative of the enterprise's head office. In the actual operation process, due to the needs of management, production and operation and other factors, the enterprise may adopt relatively independent internal branch management. The branches have relatively independent assets, business scope, etc. within the enterprise's head office, which may make these What may happen between branches is similar to the so-called provision of business management services between independent enterprises, such as the payment of trademark usage fees. However, such business activities carried out between branches within the enterprise are internal business activities. When paying corporate income tax, since they are not independent corporate income tax taxpayers and need to be paid tax by the enterprise on a consolidated basis, the expenses incurred by these internal business transactions , are not included in income and deducted as expenses. In other words, the trademark usage fees between the branch and the head office do not need to be included in the income of the head office, and the branch does not need to include expenses, so there is no issue of pre-tax deduction.
The above is what the editor has compiled for you about "trademarks" Are usage fees deductible before tax?" I hope that through the knowledge compiled by the editor, you can have a better understanding of the deduction of trademark usage fees. If you have other legal knowledge that you need to know, the Legal Savior Network also provides online legal knowledge consultation. You are welcome to provide legal knowledge consultation.
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