Categories: Specialized Tax Strategies
Structuring Royalties for Tax Efficiency refers to the strategic organization of royalty agreements to minimize tax liabilities while complying with applicable tax laws.
This process involves selecting the appropriate entities to receive royalties, determining the optimal rates, and utilizing favorable tax jurisdictions.
For example, a company might structure its royalty payments to a subsidiary in a low-tax jurisdiction, thus reducing its overall tax burden. Additionally, utilizing deductions or credits related to research and development can further enhance tax efficiency.
Effective structuring not only maximizes after-tax income but also ensures compliance with international tax regulations and transfer pricing rules.
« Back to Glossary Index