Tax & Legal

The finance ministry has decreed that a royalty debtor may not deduct expenses of the EEA royalty creditor from the gross royalty subject to withholding tax unless the expense was incurred solely in respect of the given licence.

The ECJ has held that the withholding tax on a royalty paid to a corporation in another EU country may not be more than the corporation tax rate applied to the income less the directly related costs.

The Supreme Tax Court has held that the withholding tax on royalty payments to licensors in other EU states should be on the net amount after deduction of direct costs.