Can we charge royalties and similar fees? Royalties and similar fees can be charged to operations provided payments for said fees are covered by a technology transfer agreement (TTA) which conforms with the mandatory and restrictive provisions of the Intellectual Property Code (IPC). Compliance of the TTA with the IPC requirements will not require the continue reading : Can we charge royalties and similar fees?
Royalties and similar fees are generally subject to 30% gross income tax and 12% value added tax when payable to a non-resident foreign corporation. However, the tax rates for the royalties payable to residents of foreign countries with which the Philippines has a tax treaty vary according to the terms of the respective treaties.
Reimbursements of actual cost incurred abroad for operations such as maintaining offices, advertising, commission, etc. are allowed provided they are duly supported by documents and that these costs are incurred in connection with the regular course of trade or business of the local paying company
Technology transfer arrangements refer to contracts or agreements involving the following: transfer of systematic knowledge for the manufacture of a product or the application of a process; rendering of a service, including management contracts; and the transfer, assignment, or licensing of all forms of intellectual property rights, including licensing of computer software, except computer software continue reading : What constitutes technology transfer arrangements?
Within ten days from the filing of the request for certification of compliance, the DITTB conducts a summary evaluation of the TTA. If the TTA conforms with the Prohibited Clauses and Mandatory Provisions of the IPC, the DITTB issues a Certificate of Compliance. Otherwise, the DITTB notifies the parties of any violation and requires them continue reading : How long does it take to obtain government approval?