Tax withholding on Royalty payments..

by **emmaccl** on Mon Aug 01, 2011 11:22 am

Hello all,

Apologies if I overlooked posts with similar question as this one...

For a Ltd. company in the UK, do we have to withhold tax for payments on royalty to another company in a different country?
If so, what's the tax rate? Or where can I get such information?
(And is it different if the receiving company is a member of the EU?)

I've looked on HMRC, but couldn't find an answer..
And Wiki (not the most reliable source) said Royalty expenses in the UK are exempt from taxes...?
Taxation is not my field of expertise so I would really appreciate if I can get any type of advice/source/information!

Thank you very much!

by **Generix** on Mon Aug 01, 2011 5:17 pm

emmaccl wrote:Hello all,

Apologies if I overlooked posts with similar question as this one...

For a Ltd. company in the UK, do we have to withhold tax for payments on royalty to another company in a different country?
If so, what's the tax rate? Or where can I get such information?
(And is it different if the receiving company is a member of the EU?)

I've looked on HMRC, but couldn't find an answer..
And Wiki (not the most reliable source) said Royalty expenses in the UK are exempt from taxes...?
Taxation is not my field of expertise so I would really appreciate if I can get any type of advice/source/information!

Thank you very much!

I presume such information would be contained within the double tax treaty (if one exists) with the country in question?

by **emmaccl** on Wed Aug 03, 2011 9:14 am

Generix wrote:
I presume such information would be contained within the double tax treaty (if one exists) with the country in question?

Thanks Generix!

I looked into DTs (http://www.hmrc.gov.uk/cnr/app_dtt.htm#4)
and only found information on foreign beneficiaries applications for UK tax relief on the withholded tax
But actually I am hoping to find information more from the payer's perspective...

Am I on the wrong track,
Or does this not concern the company paying the royalty?

I am not sure how this works and am very confused... I will be grateful for any help!
Thanks !

by **innovativetax** on Sun Aug 21, 2011 12:10 am

withholding tax on royalty payments to a non-UK company is generally 20% (this is subject to provisions of DTA between UK and the foreign country in question)