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24.02.2025

Royalty payable to Russian contracting parties. Tax risks

The source is a video posted on YouTube

Timeline – Presentation by Valentin Moiseev (video available in Russian language)

0:00 – Introduction. Speech content: general information about tax risks associated with royalty payment. Royalty related claims in cross-border and internal deals. How to avoid risks and properly tackle them where they have already emerged?

2:11 – Study of cases where royalties attract attention of tax authorities

4:46 – Forms of royalty related tax claims

5:54 – Situations with and causes for exclusion of royalty from expenses in full. Case examples

10:27 – Assessment of risks in case of gratuitous assignment of a license

10:54 – Reassessment of the license price by tax authorities

11:59 – Royalty and VAT. Focus on the importance of correct categorization of payment: for royalty or for services in case of a cross-border transaction

12:21 – Risks identification and mitigation. Revealing of the existence of an intellectual property item. Role of documentary evidence of the existence of know-how. Determining of the business goal of a deal, special attention to the role of the licensor