About royalties
Royalties include any amount paid or credited for:
- use of, or right to use
- any copyright, patent, design or model, plan, secret formula or process, trademark or other like property or right
- industrial, commercial or scientific equipment
- supply of scientific, technical, industrial or commercial knowledge or information
- supply of any assistance that's 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 above
- reception of, or the right to receive, visual images or sounds transmitted to the public by satellite, cable, optic fibre or similar technology
- use of, or the right to use, part of the spectrum specified in a spectrum licence under the Radio Communications Act 1992External Link
- use of, or the right to use
- motion picture films
- films or video tapes for use with television
- tapes for use with radio broadcasting
- visual images and or sounds transmitted by satellite, cable, optic fibre or other similar technology, in connection with television or radio broadcasting
- total or partial forbearance in respect of the previously listed activities.
Show royalties that an Australian resident derives as income in the normal manner.
Royalties a resident pays to a non-resident may be subject to withholding tax. The rate for royalties is 30%, however, if there is a tax treaty (a double tax agreement), the rate may be reduced.
For more on the definition of royalty, see:
- Taxation Ruling IT 2660 Income tax: definition of royalties
- section 6 of ITAA 1936.
Record keeping
If the partnership claims a deduction for royalties paid or credited, keep a record of the name and address and the amounts due to each person. If you make any payment to a non-resident, keep details of whether (or not) tax has been paid or any amount has been withheld as tax payable by the non-resident.
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