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Appendix 2: Royalties

Last updated 11 February 2019

Royalties include considerations of any kind paid or credited for:

  1. the use of, or right to use
    1. any copyright, patent, design or model, plan, secret formula or process, trademark or other like property or right
    2. industrial, commercial or scientific equipment
    3. motion picture films
    4. films or video tapes for use with television
    5. tapes for use with radio broadcasting
    6. visual images and or sounds transmitted by satellite, cable, optic fibre or other similar technology, in connection with television or radio broadcasting
    7. capacity covered by a spectrum licence under the Radio Communications Act 1992External Link  
  2. the supply of scientific, technical, industrial or commercial knowledge or information
  3. the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or enjoyment of any property, right, equipment, knowledge or information mentioned in 1a, 1b or2
  4. the reception of, or the right to receive, visual images or sounds transmitted to the public by satellite, cable, optic fibre or similar technology
  5. the total or partial forbearance in respect of the previously listed activities.

Show royalties derived by an Australian resident as income in the normal manner.

Royalties paid by a resident to a non-resident may be subject to withholding tax. The rate for royalties is 30%, however, if there is a Tax Treaty (also referred to as double tax agreement), the rate may be reduced.

For more on the definition of royalty, see IT 2660 Income tax: definition of royalties.

Record keeping

If the partnership claims a deduction for royalties paid or credited, keep a record of the name and address and the amounts paid or due to each person. If payment was made to a non-resident, keep details on whether or not tax has been paid or an amount withheld to provide for tax payable by the non-resident.