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In recent years, 'Rulehold fees' have appeared more and more frequently in import trade, and the compliance declaration of taxable royalties has become an important issue of common concern to enterprises and customs. What exactly is royalties, which royalties need to be declared to the customs, and how to declare them? Let’s introduce how to declare taxable royalties for imported goods.
What is royalties?
It refers to the fees paid by the buyer of imported goods to obtain the license or transfer of patent rights, trademark rights, proprietary technology, copyright, distribution rights or sales rights by the buyer of imported goods. ——'Measures for the Customs of the People's Republic of China to determine the taxation price of imported and exported goods' (General Administration of Customs Order No. 273)
Taxable conditions for royalties?
According to Articles 1, 13 and 14 of the 'Measures for the Customs of the People's Republic of China to determine the taxable price of import and export goods' stipulate that the taxable royalties must meet the following two conditions at the same time:
1. Related to imported goods
If one of the following conditions is met, it shall be deemed to be related to imported goods:
(I) The royalty is used to pay for patent rights or proprietary technology use rights, and the imported goods fall into one of the following circumstances:
1. Contains patented or proprietary technology;
2. Produced by patented methods or proprietary technology;
3. Designed or manufactured specifically for the implementation of patents or proprietary technologies.
(II) The royalty is used to pay trademark rights and the imported goods fall into one of the following circumstances:
1. Attached with a trademark;
2. It can be sold directly if it is attached with a trademark after importing;
3. It contains trademark rights when imported, and can be sold after light processing and attached with the trademark.
(III) The royalty is used to pay copyright and the imported goods fall into one of the following circumstances:
1. Imported goods containing software, text, music, pictures, images or other similar content, including tapes, disks, CDs or other similar carriers;
2. Imported goods containing other copyrighted content.
(IV) The royalty is used to pay for distribution rights, sales rights or other similar rights, and the imported goods fall into one of the following circumstances:
1. It can be sold directly after import;
2. It can be sold after light processing.
2. Constitute conditions for domestic sales
If the buyer fails to pay the royalty, he cannot purchase the imported goods, or if the buyer fails to pay the royalty, the goods cannot be sold on the terms agreed in the contract, it shall be deemed that the payment of the royalty constitutes a condition for the sale of the imported goods to the territory of the People's Republic of China.
How to declare royalties?
1. Taxable royalties paid
If the taxable royalties have been paid when the goods are declared for import, the amount paid should be filled in the 'Miscellaneous Fees' column of the customs declaration form, and there is no need to fill in the 'Total Price' column.
2. Taxable royalties not paid
If the taxable royalties are not paid when the goods are declared for import, in the original goods import customs declaration form 'Royalty Payment Confirmation' column, select 'Yes', and complete the tax declaration procedures with the customs within 30 days after each payment and fill out the 'Taxable royalties Reporting Form'.
When filling out the royalty tax declaration form, fill in the customs declaration form 'Supervision Methods' column 'Royalty subsequent taxation' (code 9500), fill in the original imported goods name in the 'Commodity Code' column, fill in the original imported goods code in the 'Legal Quantity' column, fill in the '0.1' column, fill in the 'Total Price' column, fill in the amount of taxable royalties paid each time, fill in the 'Gross Weight' and 'Net Weight' columns'1'.
What are the consequences of not reporting truthfully?
Case 1:
A certain enterprise in the jurisdiction declared 27 tickets of goods from August 2021 to November 2023. It has to pay the seller a taxable royalty related to the imported goods, but did not fill in the 'Yes' in the 'Payment of Royalties Confirmation' column, which violates the provisions of Article 24, paragraph 1 of the Customs Law of the People's Republic of China, and this behavior affects the order of customs supervision.
According to Article 15, Paragraph 2 of the 'Regulations on the Implementation of Customs Administrative Penalties of the People's Republic of China', the enterprise department was fined nearly 30,000 yuan.
Case 2:
A certain enterprise in the jurisdiction paid taxable royalties overseas from September 2022 to November 2023, and did not declare them to the customs within 30 days after payment. Violating the provisions of Article 24, Paragraph 1 of the Customs Law of the People's Republic of China, this behavior affects the collection of taxes.
According to Article 15, Item 4 of the 'Regulations on the Implementation of Customs Administrative Penalties of the People's Republic of China', the enterprise department was fined 100,000 yuan.
What should I do if I find that there is a royalty fee that has not been declared after self-examination?
Proactively disclose to the customs, those who meet the conditions can enjoy the following policy dividends:
(1) Light punishment: lighter, reduce or do not impose administrative penalties;
(2) Spend less money: you can apply for a reduction of late payment fees;
(3) Credit protection: The behavior of import and export enterprises or units that actively disclose and are subject to warnings by the customs or fines of less than RMB 1 million shall not be included in the record of the credit status of the enterprise determined by the customs.
Source: Fuzhou Customs 12360 | If there is any infringement, please contact us to delete it
