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Friday 18 November 2011

Patricia Covarrubia

Royalties and taxes: do they need to be reassessed?

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Karin Klempp, a specialist in commercial contracts and intellectual property, considered at the seminar held on November 9, in Rio de Janeiro, that the tax issue relating to technology transfer should be reconsidered because it is out of date. This event, which was announced here in this blog, heard Miss Klempp saying that the economic and political reality "is no longer consistent with the maintenance of the interpretive guidelines of the policy of import substitution, foreign exchange control and with strong regulation in tax."

In this regards she referred to two outdated matters:
• tax deductibility: regulated by a law of 1958, a period of strong protectionism; and
• technology transfer: in 1962 there was the creation of registration of foreign capital which took control over royalties and IP contracts - area of the INPI in 1972.

However, exploring a more bias economical matter, Katia Freitas Pinto, a professor of the Academy of the INPI covered the licensing of patents. She warned that patents only have a temporary monopoly, and thus, it should be 'dynamically’ observed. She argued that by giving back to those who develop and promote, patents serve as incentive for innovation, which is compatible with technology transfer.

Now if we go back to the issue of Tax, I remembered that Malta for example has an exception on royalties from qualifying patents and it now has been extended to cover royalty income from works protected by copyright and other IPRs.[this really is a reassessment]

Source INPI.

Patricia Covarrubia

Patricia Covarrubia