Customs and Tax Issues When Remitting Royalties (Addition of Royalty Fees)

Question

I am planning to remit a certain percentage of the sales generated from importing goods from abroad as royalties. In this case, are there any tax issues related to these royalties?

tflow_expert · Answer

Royalties are assessed for addition to the customs value as royalty payments under the Customs Act. If both conditions—the transaction value condition and the relationship to the goods—are met, they must be added to the customs value of the imported goods for declaration, which may result in additional customs duties and VAT. As you inquired, if royalties are calculated after sales have occurred, you may file a provisional declaration and subsequently file a final declaration. For specific details, please consult with a professional, such as a customs broker, regarding customs clearance.

Customs and Tax Issues When Remitting Royalties (Addition of Royalty Fees)

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