Royalties are zero now! Do you remember?
28.03.2011Company: Amcham
This story is so old that many of us have forgotten about it. Council Directive No. 2003/49/EC was negotiated a long time ago and was passed just a little later. But it only became applicable in the Czech Republic at the beginning of this year.
The Directive should help the circulation of the outcomes of research and development, software, literary work, trademarks and other subjects of intellectual property around the EU by exempting payments provided for using these rights from withholding tax in the source country. It is actually a similar principal to that of dividends paid between the countries in the EU we are accustomed to.
Royalties paid by a Czech company to a company which is a resident in another EU member state or the Swiss Confederation, Norway or Iceland and which is connected to it through capital may be completely exempt from Czech withholding tax (irrespective of the fact that the relevant double taxation treaty allows for tax to be deducted at the source). All you need to begin to claim exemptions is a decision on the award of such exemption by the competent tax administrator. A number of documents must be submitted to the tax administrator – such as relevant agreements, certain confirmations of foreign tax administrators and documents proving the capital ties. But once you have provided all that is needed, the remaining process should not be difficult at all. Withholding tax is 5% for payments to Germany, 10% for France, 10% for Switzerland and 10% for Britain. This may be worth some paperwork.
www.tacoma.eu
