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55 Royalty expenses overseas

Last updated 11 February 2019

Show at R the royalty expenses paid to non-residents during the income year.

Include this amount at J item 5, plus or minus any reconciliation adjustment for royalty expenses that you included in B Expense reconciliation adjustments item 5.

An amount of tax (withholding tax) is generally withheld from royalties paid or payable to non-residents and from royalties derived by a resident through an overseas branch. You must remit this amount to the ATO. You cannot claim a deduction unless you have remitted any withholding tax to the Commissioner. If you have withheld amounts from payments to non-residents, you may need to lodge a PAYG withholding from interest, dividends and royalty payments paid to non-residents - annual report by 31 October 2012.

Record keeping

Keep a record of the following:

  • name and address of recipient(s)
  • amounts paid
  • nature of the benefit derived - for example, a copy of the royalty agreement
  • details of tax withheld where applicable, and the date on which it was remitted to the ATO.