Taxation of Foreign Companies for Foreign Direct Investments

To summarise, if the consideration provided is for the acquisition of a shrink-wrapped product, i.e. a right other than an intellectual property right, the payment should not be considered as royalties but rather as business revenue. Nevertheless, if the payment is for the right to commercially utilise the software’s intellectual property, it might be considered a royalty. If the foreign company’s services in connection to computer software make accessible technical knowledge, expertise, talent, understand, or processes, or comprises of the formulation and transfer of a technical design or technical layout, the costs for included or tech support would be considered.