No taxes are levied on royalty payments for trademark use – PIS-Import and Cofins-Import. This understanding belongs to the 1st Ordinary Panel of the 3rd Chamber of the 3rd Section of the Administrative Council of Tax Appeals (Carf).
Unanimously, the panel followed the understanding of the reporting counselor, Ari Vendramini. In his view, the remittance of amounts to persons resident or domiciled abroad as royalties for the trademark use license does not attract the levy of the taxes.
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“This is because royalties represent income received in consideration for an obligation to give, which is why they cannot be considered the provision of services, which, in turn, constitutes an obligation to do,” he says.
According to the reporting counselor, the triggering event of the contributions is the consideration for the service rendered. “Thus, there is no levy on the payment of royalties. In cases where there is a contractual provision for the concurrent supply of services, the contract must clearly itemize the royalties, the services, and the technical assistance, in order to individualize the levy of PIS-Import and Cofins-Import,” he explains.
The reporting counselor adds that, considering royalties to be income arising from the use, enjoyment, and exploitation of rights (an obligation to give), and not from the provision of services (an obligation to do), it is possible to conclude that the amounts relating to royalties are not reached by the aforementioned contributions.
“Let us consider that, in cases where there is a contractual provision for the concurrent supply of services, the contract must be sufficiently clear to itemize the royalties, so that there is no levy on the amount paid as royalties. In this case, the contributions on imports will be levied only on the amounts of the related contracted services,” he points out.
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Source: Conjur/Gabriela Coelho
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