Royalty is now very fashionable and beautiful word. What is behind it? The answer to the question is quite simple: royalties are that part of the proceeds from the sale of a product that its (product) author receives. Despite the simplicity of the wording, the topic is quite extensive and in this regard, the taxation and accounting of such transactions has a number of features. Let's try to deal with some of them.
Scope and some legal issues
The concept of royalty can be attributed to several legal areas. Thus, it is used as one of the forms of payment under the agreement of the now widespread franchising and denotes royalties and license payments for the commercial use of intellectual property owned by another person (patent, trademark, work of art, etc.).
And, finally, royalties in economics and land law (a term used in world practice) - rent for the right to develop natural resources contributed by the entrepreneur to the owner of the land or subsoil.
The legal relations of the parties regarding royalties related to franchising activities are regulated by Chapter 54 of the Civil Code of the Russian Federation (the basis of relations: a commercial concession agreement). In accordance with paragraph 4 of Article 1027 of the Civil Code of the Russian Federation, all the rules of the Civil Code of the Russian Federation on a license agreement apply to a commercial concession agreement. The only difference between a commercial concession agreement and a license agreement from a legal point of view is the object of the agreement. In a commercial concession agreement, an object is a set of exclusive rights, while in a license agreement it is the right to use an intellectual property object.
Based on paragraph 2 of Art. 1028 of the Civil Code of the Russian Federation, a commercial concession agreement is subject to state registration with the federal executive body for intellectual property (Rospatent). By general rule Art. 1031 of the Civil Code of the Russian Federation (which may be amended by the agreement), a commercial concession agreement must be registered by the right holder (franchisor). If the registration requirement is not observed, the contract is considered void (according to Article 1031, clause 2 of Article 1028, clauses 3 and 6 of Article 1232, clause 1 of Article 1490 of the Civil Code of the Russian Federation).
Relations between individuals (authors) and persons receiving exclusive rights to works are regulated by Chapter 70 of the Civil Code of the Russian Federation. It determines that the relationship must be confirmed in writing in the form of a contract of a certain type. These are the types of contracts:
- an agreement on the alienation of the exclusive right to a work and the right to use the work under a license (Article 1285 of the Civil Code of the Russian Federation);
- license agreement on granting the right to use the work (Article 1286 of the Civil Code of the Russian Federation);
- author's order agreement (Article 1288 of the Civil Code of the Russian Federation).
It is necessary to dwell separately on contracts with foreign counterparties, because the question arises as to the applicable law (Russian or foreign). According to paragraph. Art. 1211 of the Civil Code of the Russian Federation, by default, the law of the country with which the contract is most closely connected applies to the contract. Relations between the parties under a license agreement are governed by the law of the state where the licensor is located. At the same time, Art. 1210 of the Civil Code of the Russian Federation allows the parties to the contract to choose the law that is subject to application to their rights and obligations under this contract. When applying Russian law, relations automatically fall under the regulation of part 4 of the Civil Code of the Russian Federation.
Tax aspects
income tax
An expense in the form of royalties is recognized in the period to which it relates, on the date of settlement in accordance with the terms of the concluded agreement or on the date of presentation to the user of the documents that serve as the basis for making settlements, or on the last day of the reporting (tax) period (paragraph 3 of clause .7 article 272 of the Tax Code of the Russian Federation).
For the purposes of taxation, income from the provision of rights to the results of intellectual activity for use, in accordance with paragraph 5 of Art. 250 of the Tax Code of the Russian Federation, refer to non-operating income, if they are not determined by the taxpayer in the manner prescribed by Art. 249 of the Tax Code of the Russian Federation, as income from the sale of property rights. So, if for the right holder this type of activity is one of the main types of activity, then income is recognized in accordance with Art. 249 of the Tax Code of the Russian Federation, and if not, then in accordance with Art. 250 of the Tax Code of the Russian Federation.
In paragraph 3, paragraph 4 of Art. 271 of the Tax Code of the Russian Federation, it is determined that for non-operating income in the form of royalties, the date of receipt of income is the date of settlement in accordance with the terms of concluded agreements, the date of presentation to the taxpayer of documents serving as the basis for making calculations, or the last day of the reporting (tax) period.
Important:
International aspect
One of the most common tax planning schemes is the transfer of intellectual property rights to an offshore company in order to accumulate royalties in a tax-free jurisdiction.
UNCTAD estimates that the global offshore industry is valued at $12 trillion (http://www.unctad.org). Do not do without the use of offshore business and Russian organizations. The use of offshore jurisdictions by Russian organizations affects not only their internal interests, but also the interests of Russia as a whole. Tax evasion reduces funding for the public sector of the country's economy, and companies that evade taxes through such schemes may be in a better position than law-abiding taxpayers.
However, investing capital in countries that have low tax rates or exemption from taxation at the "source of payment" of such income as royalties, on the other hand, has its positive aspects for organizing business by increasing the competitiveness of companies at the national and global levels through the use of more flexible development strategies.
The taxation of foreign organizations that do not operate through permanent establishments and receive income from sources in the Russian Federation has some peculiarities.
Foreign organizations that receive income from sources in the Russian Federation are recognized as payers of corporate income tax (paragraph 3, clause 1, article 246 of the Tax Code of the Russian Federation).
The object of income taxation for such foreign organizations is the income defined in paragraph 4 of paragraph 1 of Art. 309 of the Tax Code of the Russian Federation. These include payments of any kind received as a consideration for the use (grant of the right to use) of any patent, trademark, drawing or model, plan, secret formula or process, or use (grant of the right to use) of information relating to industrial, commercial or scientific experience. .
At the same time, the obligation to calculate, withhold and transfer income tax to the budget foreign organization is assigned to a tax agent - a Russian organization (clause 1, article 310 of the Tax Code of the Russian Federation).
On a note:
If a foreign organization does not have permanent representative offices on the territory of the Russian Federation, then its income in accordance with paragraph 1 of paragraph 2 of Art. 284 of the Tax Code of the Russian Federation are taxed at a rate of 20%. However, if a foreign company is a resident of one of the states with which the Russian Federation has an international agreement on the avoidance of double taxation, a reduced tax rate or exemption from tax in the Russian Federation may be applied (clause 4, clause 2, article 310 of the Tax Code of the Russian Federation) . Such situations are discussed in detail in the Letter of the Federal Tax Service for Moscow No. 19-12 / 109890 of November 25, 2008.
For the purposes of calculating VAT, the activity of the right holder is considered as the provision of services, as an activity, the results of which do not have a material expression, and are also realized and consumed in the course of this activity (clause 5, article 38 of the Tax Code of the Russian Federation). The right holder is obliged to accrue VAT on the amount of remuneration and issue to the user a duly executed invoice for the royalty amount - on the date of settlement in accordance with the terms of the agreement.
As for relations with foreign companies, the situation is as follows.
By virtue of subclause 1 clause 1 of Art. 146 of the Tax Code of the Russian Federation, transactions involving the sale of goods (works, services) in the territory of the Russian Federation are recognized as objects of value added taxation.
The procedure for determining the place of sale of works (services) for the purpose of applying value added tax is established by Art. 148 of the Tax Code of the Russian Federation. The place of sale of services for the transfer, granting of patents, licenses, trademarks, copyrights or other similar rights is the territory of the Russian Federation, if the buyer of services operates in this territory (clause 4, clause 1, article 148 of the Tax Code of the Russian Federation).
When services are sold by a foreign person who is not registered with the Russian tax authorities, the place of sale of which is the territory of the Russian Federation, VAT is calculated and paid to the Russian budget by the tax agent purchasing these services from a foreign person (Article 161 of the Tax Code of the Russian Federation). The tax base is also determined by tax agents. The tax amount is calculated using the estimated rate according to the rules of clause 4 of Art. 164 of the Tax Code of the Russian Federation. The tax base is determined on the date of receipt of each monthly payment based on the amount actually received in rubles (paragraph 2, clause 1, article 154 of the Tax Code of the Russian Federation, clause 2, clause 1, article 167 of the Tax Code of the Russian Federation).
A Russian organization that has paid the relevant tax amounts to the budget as a tax agent has the right to deduct these amounts in the manner provided for in Articles 171, 172 of the Tax Code of the Russian Federation, provided that the services are purchased for VAT-taxable operations, and the deduction is made in full after acceptance of services. The basis for their application will be documents confirming the payment of tax amounts withheld by the tax agent (clause 3 of article 171 of the Tax Code of the Russian Federation and clause 1 of article 172 of the Tax Code of the Russian Federation).
personal income tax
Royalties received by an individual are subject to personal income tax. An organization paying royalties is a tax agent, therefore it is obliged to calculate, withhold from the recipient and pay the amount of tax (clause 1 and clause 2 of article 226 of the Tax Code of the Russian Federation).
At the same time, it should be taken into account that, in accordance with Art. 221 of the Tax Code of the Russian Federation for remuneration for the performance or other use of works of science, literature and art, remuneration for authors of discoveries, inventions and industrial designs, professional tax deductions are provided.
Accounting
In organizations whose subject of activity is the granting for a fee of rights arising from patents for inventions, industrial designs and other types of intellectual property, revenues are considered to be income, the receipt of which is associated with this activity. Thus, remuneration should be included in income from ordinary activities in the reporting period in which they were accrued under the terms of the agreement (clauses 12 and 15 of PBU 9/99).
The expenses of the organization for the payment of royalties associated with the main activities are recognized as expenses for ordinary activities in accordance with paragraph 5 of PBU 10/99, approved by Order of the Ministry of Finance of Russia dated 06.05.1999 N 33n.
Example
In October 2011, Alfa LLC transferred to the Company the right to use a set of exclusive rights to intellectual property objects (this service is the main activity). Monthly payments are set at a fixed amount in euros and are subject to receipt on the terms of 100% advance payment in rubles at the official exchange rate of the Bank of Russia on the day of payment. The monthly payment under the agreement is set at 118 euros (including VAT) and is due no later than the 15th day of the month preceding the settlement month. The euro exchange rate set by the Bank of Russia as of October 15, 2011 is 41.6638 rubles/euro.
Dt 51 “Settlement accounts” Kt 76-5 “Settlements with other debtors and creditors”
4 916 rub. (€118* 41, 6638)- Prepayment received from
users for November
D-t 76-VAT K-t 68-2 "Calculations for VAT" 750 rubles. (RUB 4,916 x 18/118) - VAT calculated from the received prepayment
Dt 76-5 Kt 90.1 "Sales" 4,916 rubles. (118 euros * 41, 6638) - Reflected income for
november
Dt 90-3 "Value Added Tax" Kt 68.2 750 rubles. (4,916 rubles x 18/118) - VAT calculated on income
Dt 68-2 Kt 76-VAT 750 rub. - Accepted for deduction of VAT calculated from the amount of advance payment for November
Royalties - a periodic payment for the right to use a license for goods, inventions, patents, innovations, publishing books, film rentals.
Based on the customs of business turnover, royalties are paid monthly under the relevant license agreements for the right to use, in our case, rights for a patent.
Within the framework of civil law relations, royalties will be remuneration under a license agreement (clause 5, article 1235 of the Civil Code of the Russian Federation). Russian legislation does not set limits on the maximum amount of royalties paid under license agreements.
Therefore, the parties, based on the freedom of legal will, have the right to establish any reasonable value of such an agreement. These license agreements are subject to state registration, without which they are invalidated (clauses 2,, 6 of article 1232, paragraph 2 of clause 2 of article 1235, clause 1 of article 1490 of the Civil Code of the Russian Federation) * (1) .
income tax
For profit tax purposes, monthly payments (royalties) for the use of the licensor’s invention (name) in the production of products are recognized as other costs associated with production (subclause 37, clause 1, article 264, subclause 8, clause 2, article 256 of the Tax Code of the Russian Federation) , and are taken into account when forming the tax base for income tax.
value added tax
Based on the explanations of the Ministry of Taxation of Russia, set out in a letter dated September 24, 2003 N OS-6-03 / [email protected]"On the procedure for calculating and paying value added tax", the tax base specified in paragraph 1 of Art. 161 of the Tax Code of the Russian Federation, when selling goods (works, services) for foreign currency, determined by the tax agent, is calculated by converting the expenses of the tax agent in foreign currency into rubles at the exchange rate of the Central Bank of the Russian Federation on the date of sale of goods (works, services), i.e. on the date of transfer Money tax agent in payment for goods (works, services) to a foreign person who is not registered with the tax authorities as a taxpayer. The tax agent recalculates the tax base for the sale of goods (works, services) for foreign currency into rubles at the exchange rate of the Central Bank of the Russian Federation on the date of actual expenditures (including if these expenses are advance or other payments), regardless of the adopted accounting policy for tax purposes.
The amount of VAT withheld from a foreign company is paid to the budget simultaneously with the transfer of funds to a foreign company under a license agreement (paragraph 2, clause 4, article 174 of the Tax Code of the Russian Federation).
The amount of VAT paid by the organization to the budget as a tax agent is deductible in accordance with par. 1 p. 3 art. 171 of the Tax Code of the Russian Federation. Tax deduction provided subject to the conditions set out in par. 3 p. 3 art. 171 of the Tax Code of the Russian Federation.
Accounting
When concluding a license agreement, intangible assets (trade name) received for use are accounted for by the user on an off-balance account in an assessment determined based on the amount of remuneration established in the agreement (clause 39 PBU 14/2007 "Accounting for intangible assets", approved by order of the Ministry of Finance Russia dated December 27, 2007 N 153n).
Since the Instructions for the use of the Chart of Accounts accounting financial and economic activities of organizations, approved. By order of the Ministry of Finance of Russia dated October 31, 2000 N 94n, there is no separate off-balance sheet account for accounting for intangible assets received for use, an organization can open an account, for example, 012 "Intangible assets received for use". At the same time, payments for the granted right to use the results of intellectual activity or means of individualization, made periodically, calculated and paid in the manner and terms established by the agreement, are included by the user (i.e. Russian organization) in the expenses of the reporting period for ordinary activities (clause 5 PBU 10/99 "Expenses of the organization", approved account 76 and credit of account 68 "Calculations on taxes and fees". Payment of VAT to the budget is reflected in the debit of account 68 and credit of account 51 "Settlement accounts". Tax deduction for VAT in the amount of paid the amount is reflected in the debit of account 68 and the credit of account 19 "Value added tax on acquired valuables".
Maximum royalty limit
In accordance with Art. 252 of the Tax Code of the Russian Federation, reasonable and documented expenses incurred by the taxpayer are recognized as expenses. Justified costs are understood as economically justified costs, the assessment of which is expressed in monetary terms. Documented expenses are understood as expenses confirmed by documents drawn up in accordance with the legislation of the Russian Federation. Any expenses are recognized as expenses, provided that they are made for the implementation of activities aimed at generating income.
Based on this, the taxpayer must confirm the actual use of the patent in activities aimed at making a profit. And the structure of expenses incurred by type of activity, including license fees, should correspond to the structure of the company's income.
Pretty simple: royalties are that part of the proceeds from the sale of a product that its (product) author receives. Despite the simplicity of the wording, the topic is quite extensive and in this regard, the taxation and accounting of such transactions has a number of features. Let's try to deal with some of them.
Scope and some legal issues
The concept of royalty can be attributed to several legal areas at once. So, it is used as one of the forms of payment under the contract is now widely used in the field of franchising and denotes royalties and license payments for the commercial use owned by another person (a patent, a work of art, etc.).
And, finally, royalty in economics and land law (a term used in world practice) is a rent for the right to develop natural resources, paid by an entrepreneur to the owner of land or subsoil.
The legal relations of the parties regarding royalties related to franchising activities are regulated by Chapter 54 of the Civil Code of the Russian Federation (the basis of relations: a commercial concession agreement). In accordance with paragraph 4 of Article 1027 of the Civil Code of the Russian Federation, all the rules of the Civil Code of the Russian Federation on a license agreement apply to a commercial contract. The only difference between a commercial concession agreement and a license agreement from a legal point of view is the object of the agreement. In a commercial concession agreement, an object is a set of exclusive rights, while in a license agreement it is the right to use an intellectual property object.
Based on paragraph 2 of Art. 1028 of the Civil Code of the Russian Federation, a commercial concession agreement is subject to the federal agency for intellectual property (Rospatent). As a general rule, Art. 1031 of the Civil Code of the Russian Federation (which may be amended by the agreement), a commercial concession agreement must be registered by the right holder (franchisor). If the registration requirement is not observed, the contract is considered void (according to Article 1031, clause 2 of Article 1028, clauses 3 and 6 of Article 1232, clause 1 of Article 1490 of the Civil Code of the Russian Federation).
Relations between individuals (authors) and persons receiving exclusive rights to works are regulated by Chapter 70 of the Civil Code of the Russian Federation. It determines that the relationship must be confirmed in writing in the form of a contract of a certain type. These are the types of contracts:
- an agreement on the alienation of the exclusive right to a work and the right to use the work under a license (Article 1285 of the Civil Code of the Russian Federation);
- license agreement on granting the right to use the work (Article 1286 of the Civil Code of the Russian Federation);
- copyright agreement (Article 1288 of the Civil Code of the Russian Federation).
As for royalties in the economy, from the point of view of world practice, the mineral extraction tax introduced in the Russian Federation in 2002 actually performs the function of a royalty (payment to the owner of resources for the right to develop reserves).
It is necessary to dwell separately on contracts with counterparties, because the question arises as to the applicable law (Russian or foreign). According to paragraph. Art. 1211 of the Civil Code of the Russian Federation, by default, the law of the country with which the contract is most closely connected applies to the contract. Relations between the parties under a license agreement are governed by the law of the state where the licensor is located. At the same time, Art. 1210 of the Civil Code of the Russian Federation allows the parties to the contract to choose the law that is subject to application to their rights and obligations under this contract. When applying Russian law, relations automatically fall under the regulation of part 4 of the Civil Code of the Russian Federation.
Tax aspects
income tax
An expense in the form of royalties is recognized in the period to which it relates, on the date in accordance with the conditions or on the date of presentation to the user of the documents that serve as the basis for making calculations, or on the last day of the reporting (tax) period (clause 3, clause 7 of Art. 272 of the Tax Code of the Russian Federation).
For the purposes of taxation, income from the provision of rights to the results of intellectual activity for use, in accordance with paragraph 5 of Art. 250 of the Tax Code of the Russian Federation, refer to non-operating income, if they are not determined by the taxpayer in the manner, art. 249 of the Tax Code of the Russian Federation, as income from the sale of property rights. So, if for the right holder this type of activity is one of the main types of activity, then income is recognized in accordance with Art. 249 of the Tax Code of the Russian Federation, and if not, then in accordance with Art. 250 of the Tax Code of the Russian Federation.
In paragraph 3, paragraph 4 of Art. 271 of the Tax Code of the Russian Federation, it is determined that for non-operating income in the form of royalties, the date of receipt of income is the date of settlement in accordance with the terms of concluded agreements, the date of presentation to the taxpayer of documents serving as the basis for making calculations, or the last day of the reporting (tax) period.
Important:
International aspect
One of the most common tax planning schemes is the transfer of intellectual property rights to an offshore company in order to accumulate royalties in a tax-free jurisdiction.
UNCTAD estimates that the global offshore industry is valued at $12 trillion (http://www.unctad.org). Do not do without the use of offshore business and Russian organizations. The use of offshore jurisdictions by Russian organizations affects not only their internal interests, but also the interests of Russia as a whole. Tax evasion reduces the public sector of the country's economy, and companies that evade taxes through such schemes may be in a better position than law-abiding taxpayers.
Accounting
In organizations whose subject of activity is the granting for a fee of rights arising from patents for inventions, industrial designs and other types of intellectual property, revenues are considered to be income, the receipt of which is associated with this activity. Thus, remuneration should be included in income from ordinary activities in the reporting period in which they were accrued under the terms of the agreement (clauses 12 and 15 of PBU 9/99).
The expenses of the organization for the payment of royalties related to the main activities are recognized as expenses for ordinary activities in accordance with paragraph 5 of PBU 10/99, approved by Order No. 33n dated 06.05.1999.
Example
In October 2011, Alfa LLC transferred to the Company the right to use a set of exclusive rights to intellectual property objects (this service is the main activity). Monthly payments are set at a fixed amount in euros and are receivable on a 100% advance payment basis in rubles at the official exchange rate on the day of payment. The monthly payment under the agreement is set at 118 euros (including VAT) and is due no later than the 15th day of the month preceding the settlement month. The euro exchange rate set by the Bank of Russia as of October 15, 2011 is 41.6638 rubles/euro.
Dt 51 “Settlement accounts” Kt 76-5 “Settlements with other debtors and creditors”
4 916 rub. (€118* 41, 6638)- Prepayment received from
users for November
D-t 76-VAT K-t 68-2 "Calculations for VAT" 750 rubles. (RUB 4,916 x 18/118) - VAT calculated from the received prepayment
Dt 76-5 Kt 90.1 "Sales" 4,916 rubles. (118 euros * 41, 6638) - Reflected income for
november
Dt 90-3 "Value Added Tax" Kt 68.2 750 rubles. (4,916 rubles x 18/118) - VAT calculated on income
Dt 68-2 Kt 76-VAT 750 rub. - Accepted for deduction of VAT calculated from the amount of advance payment for November
Publication
Royalties in practice are faced by companies that use or lend any kind of intellectual property, such as patents, computer programs or trademarks. The use of an exclusive right occurs under a license agreement for a fee - royalties, periodic fixed or interest payments to the right holder.
The parties to the license agreement are the licensor and the licensee (Clause 1, Article 1233 of the Civil Code of the Russian Federation).
- licensor - one who grants the other party (licensee) the right to use intellectual property (non-exclusive right) (Articles 1235, 1243 of the Civil Code of the Russian Federation);
- licensee - pays for and accepts intellectual property for use. In other words, it receives non-exclusive rights to it under the concluded agreement (Article 1235 of the Civil Code of the Russian Federation).
- Data of the licensor and licensee.
- Subject of the agreement: description of the object of intellectual property being transferred and a list of actions that the licensee has the right to perform with it.
- Type of license agreement (exclusive or non-exclusive license).
- The territory in which the transferable right can be exercised. If the territory is not specified, then it is understood as the Russian Federation.
- The period for which the contract is concluded.
- Conditions, procedure for payment and amount of the licensor's remuneration or gratuitousness of the transaction.
- Conditions, terms and procedure for the licensee's report on the use of an intellectual property object. If such a report is not required, this should be mentioned in the contract;
Z3 Accounting. The intangible asset transferred under the license agreement continues to be listed on the balance sheet of the licensor (clause 38 PBU 14/2007). It is accounted for in a separate sub-account. For example, to account 04 "Intangible assets", a subaccount "Intangible assets transferred for use under a license agreement" is opened. At the same time, they make the following wiring:
Dt 04 sub-account “Intangible assets transferred for use under a license agreement” Kt 04 sub-account “Intangible assets without encumbrance” - non-exclusive rights to an intangible asset were transferred.
Depreciation
Having transferred an intangible asset for use, depreciation is still charged on it, and it is calculated in the general manner (paragraph 38 of PBU 14/2007).
If the transfer of non-exclusive rights to intellectual property is the subject of the company's activities, then the amount of accrued depreciation is taken into account as expenses for ordinary activities (paragraph 5 of PBU 10/99). The wiring will look like this:
Dt 20 (44 ...) Kt 05 sub-account "Depreciation of intangible assets transferred for use" - the amount of accrued depreciation on an intangible asset transferred for use is reflected.
When the transfer of non-exclusive rights to intellectual property is not a separate type of activity of the organization, then the depreciation amounts must be taken into account as part of other expenses (clause 11 PBU 10/99, approved by order of the Ministry of Finance of Russia dated 06.05.1999 No. 33n). The operation is reflected in the following wiring:
Dt 91-2 Kt 05 sub-account “Depreciation of intangible assets transferred for use” - the amount of accrued depreciation for an intangible asset transferred for use is reflected.
Revenue
The transfer of intellectual property for use usually entails the receipt of income by the licensor. If the lease of intellectual property objects is one of the company's activities, then royalties are recognized as revenue (clause 5 of PBU 9/99). This is reflected in the account as follows:
Dt 62 (76) Kt 90-1 - license fees have been accrued.
If the transfer for use is not the subject of the company's activities, then the income received must be included in other income. The accounting entry will look like this:
Dt 62 (76) Kt 91-1 - license fees have been accrued.
Example 1
LLC "Ferma" acquired from "Zootechnika" the right to use this selection achievement for one year. Under the agreement, "Farm" undertakes to pay "Zootechnika" monthly remuneration in the amount of 3540 rubles. (including VAT - 540 rubles).
Since the object of activity of LLC Zootekhnika is the provision of breeding achievements belonging to it for temporary use, the income from the transaction is recognized as revenue. So, when transferring an object of intellectual property, the accountant of Zootekhnika made the following entry:
Dt 04 sub-account “Intangible assets transferred for use” Kt 04 sub-account “Intangible assets held by the organization” - 150,000 rubles.
The accountant also continues to calculate depreciation, monthly making an entry:
Dt 20 Kt 05 "Depreciation of intangible assets transferred for use" -2500 rubles.
Then the accountant writes off these expenses to the cost of sales:
Dt 90-2 Kt 20 - 2500 rubles.
The accountant considers license payments as revenue:
Dt 62 “Settlements with buyers and customers” Kt 90-1 - 3540 rubles.
VAT is charged on the amount of revenue:
Dt 90-3 Kt 68 - 540 rubles.
Upon receipt of payments from Ferma LLC, the accountant makes an entry:
Dt 51 Kt 62 - 3540 rubles.
Upon termination of the contract, the accountant will post:
Dt 04 sub-account "Intangible assets held by the organization" Kt 04 sub-account "Intangible assets transferred for use" - 150,000 rubles.
Taxation
Income from the transfer of non-exclusive rights under a license agreement is non-operating, if it does not relate to income from sales (clause 5, article 250 of the Tax Code of the Russian Federation). In practice, this means the following. If the licensor enters into license agreements on a systematic basis, then revenue should be recognized as part of sales revenue. Such a conclusion can be drawn on the basis of an analysis of the provisions of tax and civil legislation (subclause 1, clause 1, article 265 of the Tax Code of the Russian Federation, article 606, clause 1, article 1235 of the Civil Code of the Russian Federation).
Just a note
Systematic means two or more times during a calendar year (clause 3, article 120 of the Tax Code of the Russian Federation).
Depending on the type of transferred intellectual property, the licensor's remuneration may be subject to VAT (Subclause 1, Clause 1, Article 146 of the Tax Code of the Russian Federation). The fact is that the transfer of certain types of intangible assets for use is exempt from VAT. Such assets include (clause 26, article 149 of the Tax Code of the Russian Federation):
- inventions;
- useful models;
- industrial samples;
- computer programs;
- Database;
- topology of integrated circuits;
- know-how.
Just keep in mind
Even if the licensor's income is not subject to VAT, the licensor is obliged to issue an invoice to the licensee for the amount of license payments (clause 3, article 169 of the Tax Code of the Russian Federation). It must be marked “Without tax (VAT)” (clause 5, article 168 of the Tax Code of the Russian Federation).
Accounting with the licensee
accounting
Intangible assets received for use are accounted for off the balance sheet (clause 39 PBU 14/2007). The account for this is not provided for by the standard chart of accounts, the company enters it independently. For example, account 012 "Intangible assets received on the basis of a license agreement." We add that the received object is accounted for in the debit of account 012 in the amount of license payments for the entire period of the contract (clause 39 PBU 14/2007). This is reflected in the account as follows:
Expenses for the payment of royalties by the licensee are related to expenses for ordinary activities (clause 5 of PBU 10/99). They are included in the expenses of the current period and are reflected in the accounting as follows:
Dt (20, 44...) Kt 60 (76) - periodic license payments are taken into account.
Example 2
As the initial data, we take the condition of Example 1 and consider accounting at Ferma LLC.
Upon receipt of an intangible asset for use, the accountant will record:
Dt 012 "Intangible assets received on the basis of a license agreement" - 36,000 rubles. (3000 rubles × 12 months).
The accountant will monthly reflect the costs of license fees in the accounting:
Dt 26 "General expenses" Kt 76 - 3000 rubles.
It will also take into account the "incoming" VAT:
Dt 19 Kt 76 - 540 rubles.
Royalty payments will be accounted for as follows:
Dt 76 Kt 51 - 3540 rubles.
Upon the expiration of the contract, the accountant will write off the cost of the intangible asset received for use:
Kt 012 "Intangible assets received on the basis of a license agreement" - 36,000 rubles.
Taxation
License payments can be taken into account when calculating income tax as part of other expenses related to production and (or) sales (subparagraphs 26, 37 and 49, paragraph 1, article 264 of the Tax Code of the Russian Federation). The main condition is compliance with Art. 252 of the Tax Code of the Russian Federation on documentary evidence and economic feasibility of costs.
The "input" VAT on license payments can be deducted by the licensee at a time. Naturally, if the conditions required for obtaining a deduction are met (clause 1, article 172 of the Tax Code of the Russian Federation).
If the licensor is individual, personal income tax must be withheld from the amount of royalties. The duties of a tax agent are performed by the licensee (Article 209, Clause 1, Article 210 of the Tax Code of the Russian Federation). An exception is payments to the heirs of the author of an invention, utility model and industrial design. Such persons pay personal income tax on their own (subclause 6, clause 1, article 228 of the Tax Code of the Russian Federation).
If the costs cannot be documented, you need to use the cost standards. They are set as a percentage of income received separately for various kinds intellectual activity. The range of standards is from 20 ( scientific developments) up to 40 percent (creation of sculptural works). Full list types of intellectual activity and the standards applicable to them are in Art. 221 of the Tax Code of the Russian Federation.
Can you please tell me whether it is necessary to draw up acts of work performed under a commercial concession agreement on a monthly basis with a monthly payment of royalties?
Or is it enough just 1 act of acceptance - transfer for the entire duration of the contract?
Answer
The payment of royalties should be taken into account on the basis of the completed primary document: it can be an act, a payment schedule, an agreement, etc. In the case when the license agreement establishes the remuneration of the licensor in the form of percentage deductions (royalties) from any indicators of the licensee's activities (for example, from revenue), a licensee's report must be drawn up. That is, if the contract provides for payments in a fixed amount, then they can be taken into account on the basis of the contract (payment schedule). If royalties depend on the revenue (turnover) of the licensee, then you need to draw up a document justifying the calculation - for example, a licensee's report.
The rationale for this position is given below in the materials of the Glavbukh System (version for commercial organizations)
1. Recommendation: How can a licensor reflect in accounting and taxation remuneration under a license agreement
Documenting
Each business transaction must be formalized with a primary accounting document (). Any documents drawn up in accordance with the requirements of the law can confirm the obligations and calculations under the license agreement. Including the contract itself, the schedule of royalties, the act of acceptance and transfer of non-exclusive rights, the licensee's report, the invoice for payment, etc. The main thing is that they contain all the mandatory details provided for in Article 9 of the Law of December 6, 2011 No. 402- FZ. At the same time, legislation on the transfer of non-exclusive rights to intellectual property.
Situation: how to recognize income in accounting in the amount of periodic license payments (royalties), if their amount is set as a percentage of the licensee's performance indicators taken from his report. The licensee did not submit a report and did not transfer the license fees on time
Recognize income in the form of royalties only after receiving a report from the licensee or other documents that can be used to determine the amount of remuneration (for example, a payment order).
In accounting, one of the necessary conditions for recognizing income (including from the transfer of non-exclusive rights to) is the condition that the amount of income can be determined (clause and PBU 9/99).
The income from the operation to grant the right to use intellectual property is remuneration in the form of royalties ().
License fees can be transferred:
- one-time fixed amounts (lump-sum payment);
- periodic fixed or percentage deductions (royalties);
- combined (mixed) payments (combination of royalty and lump-sum payment).
Such forms of remuneration are provided for by law, for example, for the transfer of non-exclusive rights to copyright works: creative and scientific works, computer programs (). However, by analogy, these forms can be applied to other types of intellectual property (and the Civil Code of the Russian Federation).
In the case when the license agreement establishes the remuneration of the licensor in the form of percentage deductions (royalties) from any performance indicators (sales proceeds, production cost, output volume, etc.), the amount of income can be reliably determined only after provided all the data necessary for the calculation. Typically used for this.
If the data necessary for calculating income are not available, then it is impossible to recognize income as received and reflect (accrue) it on accounting accounts. Since the amount of revenue (other income) cannot be reliably determined (clause and PBU 9/99). Also, the condition of documentary confirmation of the operation to receive (recognize) income () cannot be fulfilled. In this case, there is no licensee's report on the use of intellectual property. It is impossible to determine remuneration on the basis of other documents (for example, a license agreement, payment documents).*
It is not possible to recognize income from the transfer of non-exclusive intellectual property rights in the amount in which, in comparable circumstances, an entity would normally determine similar income in this situation. This rule applies to one case only. If the contract does not provide for the price for the provision of these assets for use and it cannot be established based on the terms of the contract. This procedure follows from PBU 9/99.
In this case, the price of the contract is considered to be fixed. The fact that a specific amount of remuneration cannot be calculated without the necessary data provided by the licensee does not matter, since the procedure for calculating it is determined. This follows from Article 1235 of the Civil Code of the Russian Federation. Therefore, it is impossible to apply the provisions of PBU 9/99 on determining the organization's income by calculation.
For the tax consequences of this situation for organizations that calculate income tax on an accrual basis, see.
The chief accountant advises: to avoid claims from regulatory agencies, take measures to obtain required documents from the licensee (send a telephone message, a written request, etc.).
Also, in the license agreement, provide for the procedure in case the licensee does not submit a report on the use of intellectual activity on time.
Oleg Good
State Advisor of the Tax Service of the Russian Federation II rank
2. Article: The only sure way to account for and write off trademark costs on time
How to write off funds spent on a trademark that was obtained under a license agreement
As we said, a non-exclusive right to a trademark can be obtained under a license agreement. Another way is to conclude a commercial concession agreement - franchising. The same rules apply to it as to the license agreement. Both must be registered with Rospatent. Therefore, further for convenience, we will only mention the license agreement.
The contract must specify the period of use of the right. As well as remuneration to the copyright holder - usually it consists of several parts. One of them is the initial one-time "admission fee" for obtaining the right. Or a lump sum payment. In fact, this is the price of a license.
Other parts are subsequent regular payments for the use of the sign - royalties. They are set in a fixed amount or as a percentage of revenue. And they pay during the term of the license agreement.*
Accounting
The cost of non-exclusive rights specified in the license agreement, reflect on the off-balance sheet. You can open it yourself. For example, account 012 "Intangible assets received for use."
If you pay the entire amount under the contract immediately, at the time of obtaining the right, then take it to. And during the term of the license evenly write off as expenses.
Example 2: Accounting for non-exclusive trademark rights
Odyssey LLC entered into a license agreement for three years. According to it, Iliada LLC transfers the non-exclusive right to its trademark for 82,600 rubles, including VAT - 12,600 rubles. The contract provides for payment of the entire cost of the right at the time of its transfer.
The accountant recorded the costs of acquiring the right to use a trademark as follows:
DEBIT 012
- 82 600 rubles. - the value of the non-exclusive right to the trademark is reflected off the balance sheet;
DEBIT 97 CREDIT 76
- 70,000 rubles. (82 600 - 12 600) - the right to use the trademark was obtained;
DEBIT 19 sub-account "VAT on acquired intangible assets" CREDIT 76
- 12 600 rubles. - the amount of VAT is taken into account;
DEBIT 76 CREDIT 51
- 82 600 rubles. - Paid for the right under a license agreement;
DEBIT 68 sub-account "VAT settlements" CREDIT 19 sub-account "VAT on acquired intangible assets"
- 12 600 rubles. - accepted for VAT deduction.
Then, over the course of thirty-six months (3 years × 12 months), the accountant gradually wrote off the amount attributed to . Monthly for 1944 rubles. (70,000 rubles : 36 months). And each time I did the following:
DEBIT 20 CREDIT 97
- 1944 rubles. - part of the cost of the right to use the trademark is written off.
Important detail
In the combined form of payment provided for in the license agreement, reflect the lump-sum payment evenly in expenses, as well as royalties.
When the contract amount is initially broken down into periodic payments, include them in the expenses of the reporting period in accordance with the payment schedule (). And reflect on the debit subparagraph 37 of paragraph 1 of Article 264 of the Tax Code of the Russian Federation. But at what point - depends on the terms of payment and on the method by which you recognize expenses in tax accounting.
With the accrual method, include the amount of a single payment evenly in expenses over the period of use of the right to a trademark (). Royalties are taken into account at the time of their accrual under the contract. That is, the rules are the same as in accounting. *
Using the cash method, in any case, you will reflect the amount of payments as part of other expenses only after payment (). It does not matter whether you transfer the entire amount at once or gradually during the term of the contract.
Lina Stavitskaya, expert of the Glavbukh magazine
Magazine "Glavbuh", No. 17, September 2012
*So highlighted part of the material that will help you make the right decision
