Witholding tax on royalties to go
As indicated in the chancellor's pre-Budget report, witholding tax on royalty payments is to be abolished. And in a welcome development, this measure is likely to be extended to goodwill payments.
Until now, royalty payments between UK companies incurred witholding tax at the basic rate of 22%.
Francesca Lagerberg, senior technical manager to the Institute’s Tax Faculty said: ‘We are pleased the chancellor has confirmed what he said in the pre-Budget report.
‘But we are disappointed that he has not taken on board any of the comments about the damaging nature of withholding tax on international transactions, bearing in mind that most intellectual property transactions are not confined to the UK.’