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Welcome to the EFS-seminar
“BEPS and transfer pricing, but
what about VAT and Customs?”
Rotterdam – February 3, 2016
Conference Chairman: René van der Paardt
Agenda Seminar
“An update on the transfer pricing related elements of the
OECD BEPS project” Ronald van den Brekel
“BEPS and VAT” Herman van Kesteren
“BEPS and Customs” Walter de Wit
An update on the transfer
pricing related elements
of the OECD BEPS project
February 3, 2016
Ronald van den Brekel
Agenda
• Introduction to BEPS
• The BEPS deliverables
• Overview transfer pricing related points
• EU and BEPS
The OECD BEPS Project Reasons for BEPS
Aggressive Tax Planning / Harmful
Tax Practices
Lack of relevant information at level of
tax administrations
Domestic Tax Systems not co-ordinated
across borders
Estimated Global CIT revenue losses: 4%-10% of Global CIT
USD 100-240 billion
Lack of transparency and coordination
between tax administrations
International tax standards not
keeping pace with changing global
environment
Limited country enforcement
resources
The OECD BEPS Project What is BEPS (Base Erosion and Profit Shifting)?
“Fundamental changes are needed to effectively prevent double non-taxation, as well as cases of no or low taxation associated with practices that artificially segregate taxable income from the activities that generate it.”
“The G20 finance ministers called on the OECD to develop an action plan to address BEPS issues in a co-ordinated and comprehensive manner.”
OECD Action Plan on Base Erosion and Profit Shifting, 2013
“The measures we are presenting today represent the most fundamental changes to international tax rules in almost a century: they will put an end to double non-taxation, facilitate a better alignment of taxation with economic activity and value creation, and when fully implemented, these measures will render BEPS-inspired tax planning structures ineffective.”
OECD Secretary-General Angel Gurría
Final BEPS reports
Minimum standards
► Action 5 – Harmful tax practices
► Action 6 – Treaty abuse
► Action 13 – Country-by-country reporting
► Action 14 – Dispute resolution
Reinforced standards
► OECD Transfer Pricing Guidelines
► Actions 8-10 (transfer pricing)
► Action 13 (transfer pricing documentation)
► OECD Model Tax Convention
► Action 2 (hybrid mismatch arrangements)
► Action 6 (treaty abuse)
► Action 7 (permanent establishment status)
► Action 14 (dispute resolution)
Common approaches and best practices
► Action 2 – Hybrid mismatch arrangements
► Action 3 – Controlled foreign company (CFC) rules
► Action 4 – Interest deductions and other financial payments
► Action 12 – Mandatory disclosure rules
► The output also includes analytical reports on Action 1 (digital economy, Action 11 (economic analysis) and Action 15 (multilateral instrument)
Further development
► Follow on work on several Actions
► Framework for monitoring country implementation and involvement of additional countries
Impact of BEPS final reports
Immediate impact
► Action 8 – Transfer pricing for intangibles
► Action 9 – Transfer pricing for risks and capital
► Action 10 – Transfer pricing for other high-risk transactions
► Action 13 – Transfer pricing documentation and country-by- country reporting
Treaty-based action
► Action 2– Hybrid mismatch arrangements
► Action 6 – Treaty abuse
► Action 7 – Permanent establishment status
► Action 14 – Dispute resolution
► Action 15 - Multilateral instrument
Legislative action
► Action 2 – Hybrid mismatch arrangements
► Action 3 – CFC rules
► Action 4 – Interest deductions and other financial payments
► Action 5 – Harmful tax practices
Interrelationship between BEPS Action Plan,
VAT and Customs
2 Neutralizing the
effects of hybrid
mismatch arrangements
4 Limiting base erosion
via interest deductions
and other financial
payments
5 Countering harmful tax
practices
6 Preventing the
granting of treaty benefits
in inappropriate
circumstances
7 Prevent the artificial
avoidance of PE status
8 Considering transfer
pricing for intangibles
9 Considering transfer
pricing for risks and
capital
10 Considering transfer
pricing for other high-risk
transactions
11 Collecting and
Analyzing data on BEPS
12 Disclosing
aggressive tax planning
arrangements
13 Guidance on
transfer pricing
documentation and
country-by-country
reporting
14 Making dispute
resolution mechanisms
more effective
15 Developing a
multilateral instrument to
modify bilateral tax
treaties
1 Addressing the tax
challenges of the digital
economy
3 Strengthening CFC
rules
2 Neutralizing the
effects of hybrid
mismatch arrangements
4 Limiting base erosion
via interest deductions
and other financial
payments
5 Countering harmful tax
practices
6 Preventing the
granting of treaty benefits
in inappropriate
circumstances
11 Collecting and
Analyzing data on BEPS
14 Making dispute
resolution mechanisms
more effective
15 Developing a
multilateral instrument to
modify bilateral tax
treaties
3 Strengthening CFC
rules
Action 1: Tax Challenges of the digital
economy
► Only action point that officially includes VAT.
The Final Report recommends:
► Modifying the list of PE exceptions regarding preparatory and auxiliary activities
related to the digital economy
► Introduction of an anti-fragmentation rule
► Modifying the definition of a PE to address artificial arrangements through the
conclusion of certain contract arrangements
► A correlative update to the TP Guidelines - To prevent the transfer of intangibles or
right to intangibles to tax-advantaged jurisdictions
► Changes to the CFC rules
The fundamental conclusion is that the digital economy “cannot be ring-fenced
as it is increasingly the economy itself”.
Action 7: Areas of focus
Areas of focus Significant changes
Commissionaire arrangements and similar strategies
Art. 5(5) and Art. 5(6) are amended to lower the PE threshold.
Specific activity exemptionsApplication of the specific activity exemptions from PE status in Art. 5(4) is limited to activities of a preparatory or auxiliary character. Alternatively, states may opt to retain the existing version of Art. 5(4) if they adopt a new anti-fragmentation rule.
Fragmentation of activitiesNew anti-fragmentation rule whereby the specific activity exemptions in Art. 5(4) would not apply to a place of business maintained by the enterprise or a closely related enterprise in specific circumstances.
Splitting-up of contracts (projects where activities are carried out by several closely
related entities)
Application of a principal purposes test rule or, alternatively, aggregation of time spent on connected activities (to be included in the Commentary)
Actions 8-10: Overview of the final report
BEPS Actions 8, 9 and 10 aims to
assure that transfer pricing outcomes are in line with value creation
Action 8: Intangibles
Action 8 provides a broader and
more specific definition of
intangibles.
Introduction of a six step
framework to analyse intangibles
Focus on DEMPE functions:
Development, Enhancement,
Maintenance, Protection and
Exploitation
Hard-to-Value Intangibles (HTVIs)
Cost-Contribution Arrangements
(CCAs)
Action 10: Other high-risk
transactions
Intra-group services / low value-
add services
Profit Splits (work to be continued
in 2016)
Recognition of transactions
Commodity transactions
Action 9: Risk and Capital
Focus on conduct of parties and
their financial capacity to assume
and functionality to manage risks.
Separate consideration regarding
an appropriate return to any cash
investment
Introduction of a six step
framework to analyse risks
Actions 8-10: Allocation of Risk (1)
Revised Section D of Chapter I of the OECD Guidelines:
► Accurately delineate the actual transactions
► Detailed guidance on analyzing risks as integral part of a functional analysis
► Introduction of the six-step framework
► The party assuming a risk should control the risk and have the financial
capacity to assume the risk
► ‘Cash boxes’ will attain no more than a risk-free return
Shift from the contractual reality to the economic reality with respect to risk
allocation between related parties
Actions 8-10: Allocation of Risk (2)
Identification of economically significant risks with specificity 1
Determination of contractual assumption of the specific risk 2
Functional analysis in relation to risk 3
Interpreting steps 1-34
Allocation of risk 5
Pricing the transactions taking into account the allocation of
risks6
If the associated
enterprise
(contractually)
assuming the risk
does not exercise
control over the
risk or does not have
the financial
capacity to assume
the risk, then
the risk should be
allocated to the
enterprise exercising
control and
having the financial
capacity to
assume the risk
New Six-step Framework for Analysis of Risks
Actions 8-10: New six-step analytical
framework for intangibles
Identify the intangibles and economically significant risks associated with the DEMPE
of the intangibles1
Identify the full contractual arrangements and determine legal ownership2
Detailed functional analysis to identify the parties performing functions, using assets,
and managing risks related to DEMPE3
Confirm the consistency between the terms of the relevant contractual arrangements
and the conduct of the parties4
Delineate the actual controlled transactions related to the DEMPE of intangibles5
Where possible, determine arm’s length prices for these transactions consistent with
each party’s contributions6
Actions 8-10: DEMPE functions are key
Development of
intangible asset
Enhancing
value of
intangible
asset
Maintenance
of intangible
asset
(e.g. quality
control)
Protection
of intangible
asset against
infringement
Exploitation
Action 13: Re-examining Transfer Pricing
Documentation
Master FileHigh level information about group’s business, TP policies and
agreements with tax authorities in a single document available
to all tax authorities where the MNE has operations
Local FileDetailed information about the local business, including related
party payments and receipts for products, services, royalties,
interest, etc.
Country-by-Country ReportHigh level information about the jurisdictional allocation of
profits, revenues, employees and assets
Implementation
Master / Local File: to be maintained/delivered
directly by the parent company in all countries
where it does business
Filing: generally ultimate parent to file CbC
report in jurisdiction of residence (but: EUR 750
million consolidated revenue threshold)
Timing: First set of CbC reports to be filed by
31 December 2017 for fiscal years beginning on
1 January 2016 (in other cases, the term for
filing will be one year from the close of the fiscal
year)
Implementation package Released on June
8th 2015 containing model legislation
Dutch legislation entered into force on 1
January 2016.
Country-by-country reporting, table 1
IrelandUnited Kingdom
Mexico
France
Brazil
Spain
China
United States of America
Italy
Norway
Denmark
PolandNetherlands
Australia
Non compliance is a criminal offense in the Netherlands
Spain: Group definition based on control Equity rather than stated capital and
accumulated earnings No surrogate parent provision – local filing
required
US will require CbC for calendar year 2017.
China: Filing due with tax return on 31
May No surrogate parent provision –
local filing required
Mandatory for large UK parented groups only
Already implemented
Implementation in progress
AustriaSwitzerlandCzech Republic
Belgium
Luxembourg
Implementation status
OECD United Kingdom Spain Poland Netherlands
Status Implementation
packages released in
February and June
2015 with model
legislation and model
competent authority
agreements
Draft statutory
instrument
implementing rules
issued on 5 October
2015
Legislation in force Legislation in force Legislation in force
Who Ultimate Parents of
group with revenue
of EUR 750 million
or greater
Threshold of £586
million (approximately
EUR 790 million)
WhenFor fiscal years starting
in 2016, with filing within
12 months from fiscal
year end
Secondary filing
rule1. Local filing, or
2. Filing by named
“Surrogate Parent”
entity
Voluntary local filing Local filing Not required
Penalties
Left to countriesSpecific penalty for non
compliance
General penalty for non
compliance
Transfer pricing
documentation
penalties
Criminal penalty for non
compliance
Consistent with OECD recommendations
Country-by-Country Reporting (2/2)
CBCR Implementation specifics
Action 15: Developing a Multilateral Instrument
to modify bilateral tax treaties
► The Final Report on Action 15 provides an overview of the current status
► The aim is to consistently implement the tax treaty-based measures
developed during the BEPS project
► Ad hoc group of countries have begun negotiations in May 2015. Goal is to
have multilateral instruments open for signing by December 31, 2016.
► The instrument will focus on tax treaties provisions with respect to:
► Hybrid mismatch arrangements (Action 2)
► Treaty abuse (Action 6)
► PE Status (Action 7)
► Dispute resolution (Action 14)
This instrument could result in some key BEPS recommendations taking effect
as early as of 2017 through significant changes to bilateral treaties
EU and BEPS (1)
• The EU has embraced the OECD/G20 base erosion and profit shifting
(BEPS) project and is working to integrate the results of the project at the
EU level where appropriate.
• The EU aims to coordinate on a common EU approach to avoid risk of
fragmentation in the internal market.
• The EU has already introduced legislation to implement BEPS
recommendations:
– Exchange of information on rulings between EU Member States.
– Introduction of hybrid mismatch rule and general anti-avoidance rule
(GAAR) in the Parent-/Subsidiary (P/S) Directive.
• The European Commission has launched State aid investigations into ruling
practices of Member States.
EU and BEPS (2)
• The EC Commission’s has published its EU Anti-Tax Avoidance
Package on January 28, 2016. The constituent parts are:
– The EU Anti-Tax Avoidance Directive (‘ATA Directive’);
– The Revised Administrative Cooperation Directive;
– The Communication on External Strategy; and
– The Recommendation on Tax Treaties.
Draft EU Anti-Tax Avoidance Directive
Background
• The draft ‘EU Anti-Tax Avoidance Directive (‘ATA Directive’) was released
January 28, 2016. An earlier draft (from the Council) was made public on December
11, 2015.
• The ATA Directive lays down rules against tax avoidance practices that directly affect
the functioning of the internal market.
• This ATA Directive is a first step to introduce of a European Common Consolidated Tax
Base, as its initial anti-avoidance provisions are converted into this separate Directive.
Next Steps
• The ATA Directive is currently subject to review by the EU Council and unanimous
consent in the EU Council is required for the ATA Directive to be adopted.
• Cannot be ruled out that final ATA Directive may differ significantly from current draft
and that the timetable set for agreement by July 2016 / implementation by 2017 may
not be met.
Draft EU Anti-Tax Avoidance Directive
Framework
• The scope of the ATA Directive includes all taxpayers that are subject to corporate tax in one of
more Member States, including permanent establishments (in one or more Member States) of
entities that are resident in third countries (art. 1).
• The proposed ATA Directive sets out certain minimum standards EU Member States need to
adhere to, and does not preclude the application of domestic or agreement-based provisions
aimed at safeguarding a higher level of protection for domestic corporate tax bases (art. 3).
Measures / Scope
• Having the aim of combating tax avoidance practices which directly affect the functioning of the
internal market, the ATA Directive lays down anti-tax avoidance rules in 6 specific fields:
– Uniform interest deduction denial rule in the form of an EBITDA-limit (interest limitation rule,
art. 4);
– Uniform exit taxation (art. 5);
– General Anti-Abuse Rule (‘GAAR’) (art. 7);
– Switch Over Clause, (art. 6)
– Controlled Foreign Company Rules (art. 8 and 9); and
– Rules for the avoidance of mismatches due to hybrid entities and hybrid instruments between
EU Member States (art. 10).
The BEPS project is not over, it has just started!
Also for VAT and Customs …
BEPS and VAT
February 3, 2016
Prof. Herman van Kesteren
(Tilburg University/ PwC)
Agenda
• Direct and indirect taxes
• Impact of BEPS Actions on Indirect Taxes• BEPS Action 1 Digital economy
• BEPS Action 7 (PE issues)
• BEPS Action 8 and 13 (Intangibles, Country-by-Country reporting)
28
ConsumptionIncome
Taxable person Person bearing thetax burden
Direct Indirect
Direct and indirect taxes: a comparison
Higher revenuesHigh revenues
29
The estimated impact of BEPS on the total tax revenue mix
30
2% Increase of tax revenue if BEPS actions are successful8%
Corporate income tax has currentlya 8% share in total tax revenue VAT vs CIT
ConsumptionIncome
Taxable person Person bearing thetax burden
Visible Invisible
Slow Fast
Profit shifting Consumption shifting
Direct Indirect
Higher revenuesHigh revenues
Direct and indirect taxes: a comparison
31
Shifting the recipient
?
Shifting the chargeableevent
Direct and indirect taxes: a comparisonConsumption shifting
32
FlightTicket
Right
ConsumptionIncome
Taxable person Person bearing thetax burden
Visible Invisible
Slow Fast
Profit shifting Consumption shifting
Direct Indirect
Higher revenuesHigh revenues
Direct and indirect taxes: a comparison
Profit erosion Consumptionerosion/VAT Gap
33
Profit erosion vs VAT/GST erosion (VAT Gap) 2012-2013 figures for EU-28
34
ConsumptionIncome
Taxable person Person bearing thetax burden
Visible Invisible
Slow Fast
Profit shifting Consumption shifting
Direct Indirect
Higher revenuesHigh revenues
Direct and indirect taxes: a comparison
Profit erosion VAT Gap (erosion)
Volatile
35
Robust/solid
Direct and indirect taxes: a comparisonPercentage of GDP EU-28
36
ConsumptionIncome
Taxable person Person bearing thetax burden
Visible Invisible
Slow Fast
Profit shifting Consumption shifting
Direct Indirect
Higher revenuesHigh revenues
Direct and indirect taxes: a comparison
Profit erosion VAT Gap (erosion)
VolatileInternational European
37
VAT
National VAT Act
EU Treaty
VAT Directive
38
CIT
EU Treaty
National CIT Act
Direct and indirect taxes: a comparison
OECD
Consumption/expendituresIncome/profit
Taxable person Person bearing thetax burden
Visible Invisible
Slow Fast
Volatile Solid/robustInternational
European
InterestingAlso interesting!
Profit shifting Consumption shifting
Direct Indirect
Higher revenuesHigh revenues
Direct and indirect taxes: a comparison
39
OECD Guideline 1: taxing services in jurisdiction of consumption
OECD Guideline 2: taxing services in jurisdiction of the customer
Nexus and data challenges
Simplified registration andcompliance, but separate VAT refundclaims
Impact of BEPS actions on Indirect taxesAction 1 Digital economy
40
CIT VAT/GST
Impact of BEPS actions on Indirect taxesAction 7 Permanent establishment
41
Comm.
NL
Purchase fixed establishment Welmory C-605/12
42
Without fixedestablishment
Welmory ltdCyprus
Welmory ltdPoland
Welmory LtdCyprus
WelmoryPoland
Cyprus
Polen
With fixedestablishment
Purchase fixed establishment Welmory C-605/12
43
Without fixedestablishment
Welmory ltdCyprus
Welmory ltdPoland
Welmory LtdCyprus
WelmoryPoland
Cyprus
Polen
With fixedestablishment
CIT VAT/GST
Impact of BEPS actions on Indirect taxesAction 7 Permanent establishment
44
Principal Principal
Comm.Comm.Comm.
NL
Impact of BEPS actions on Indirect taxesAction 8 and 13 Intangibles, Country-by-country reporting
• Connection transfer pricing and VAT –
impact of country-by-country reporting• What if the final price of the goods is higher/lower after all?
• Corrective documentation and lump-sum credit notes (no period-specific line
item details are available)
45
1 2
Transfer pricing (related parties) – Issue 1
• Final price is higher; adjustment at moment 1? …
1 2
Transfer pricing (related parties) – Issue 1
• … or adjustment at moment 2?
47
Taxable amount ?
Transfer pricing (related parties) – Issue 2
• Included in taxable amount?
48
Separate supply?
Transfer pricing (related parties) – Issue 2
• Or separate supply?
Transfer Pricing and VAT49
October 2015
Transfer pricing and supply of goods
50
Principal
TP adjustment
MS 1 correction at moment 1
MS 2 correction at moment 2
1
2
Transfer pricing / VAT and goods
• Issue 1, tax authorities with different
views
51
Principal
Customs authorities claim late payment fines for VAT and customs duties
In some cases also excise duty issues.
Transfer pricing / VAT and goods
• Issue 2 – Additional payments
52
Principal
= additional marketing service in some non-EU countries (Turkey), place of supply in non-EU country (effective use)
= no refund for principal
= fines and interests imposed on LRD for late payment
Transfer pricing / VAT and goods
Issue 3 - Discounts
53
Principal
Conclusions
• BEPS impact on VAT
• BEPS action 1: Digital economy
• BEPS Action 7: PE issues
• BEPS Action 8 and 13: Intangibles, Country by Country reporting
54
BEPS and Customs
February 3, 2016
Prof. Walter de Wit (Erasmus University Rotterdam/EY)
Customs & Transfer Pricing
• Customs value based on transaction value
method is preferred method;
• When transaction takes place between
two related parties, relationship may not
influence the transaction value
(transaction value must be at arms’
length);
• If not, alternative valuation method;
Customs & Transfer Pricing (II)
• Royalties and license fees related to the
goods imported into the EU to be added to
the customs value if paid as ‘a condition of
sale’ of the goods.
WCO Guide on transfer pricing and
customs
Pragmatic approach to utilizing transfer pricing
documentation to support customs value
A list of ”good practices” for customs
administrations, including the encouragement to
customs administrations to consider information
derived from transfer pricing studies when
examining related party transactions
WCO Guide on transfer pricing and
customs
A list of ”good practices” for international business,
including:
• Coordination among tax and customs departments and advisors on
transfer prices
• Consider the needs of customs authorities when preparing transfer
pricing documentation or developing Advance Pricing Agreements
• With appropriate consideration of local requirements, provide customs
administrations with advance notification that post importation
adjustments may occur
• Work with customs authorities to provide interpretation into a customs
framework of transfer pricing analyses and data
BEPS and customs: overview
• Direct consequences for customs resulting
from BEPS Actions (which regard transfer
pricing)
• EU customs measures in the same vein as
BEPS: changes to customs valuation
Aligning Transfer Pricing Outcomes with
Value Creation & customs (I)
• Relevant BEPS Actions for customs:
– Actions 8 to 10: Aligning Transfer Pricing
Outcomes with Value Creation: “(…) the Report
determines that risks contractually assumed by a
party that cannot in fact exercise meaningful and
specifically defined control over the risks, or does not
have the financial capacity to assume the risks, will
be allocated to the party that does exercise such
control and does have the financial capacity to
assume the risks.”
Aligning Transfer Pricing Outcomes with
Value Creation & customs (II)
– Actions 8 to 10: Aligning Transfer Pricing
Outcomes with Value Creation: “For intangibles,
the guidance clarifies that legal ownership alone does
not necessarily generate a right to all (or indeed any)
of the return that is generated by the exploitation of
the intangible.”
– In other words: economic reality over legal reality?
Value of goods for customs purposes
• Customs value is generally based on the transaction value
of goods
– “The price actually paid or payable for the goods when sold for
export to the customs territory of the Union, adjusted, where
necessary …”
• UCC Implementing Act:
– The transaction value of the goods sold for export to the customs
territory of the Union shall be determined at the time of acceptance of
the customs declaration on the basis of the sale occurring immediately
before the goods were brought into that customs territory.
Value of goods for customs purposes
• The CCC allows the use of the “First Sale for Export”
– In case of chain transactions, all of which result in an export to
the EU, the first sale can be used to determine the transaction
value, if it can be demonstrated that at the time of that sale the
goods are destined for export to the EU
ManufacturerUS
US Co US
Related Distribution
CoEU
€80 €100
Goods are shipped directly to EU
CCC (current legislation): Customs duty calculated on €80 rather than €100 (subject to certain conditions being met).
EU
Example
ManufacturerUS
US Co US
Related Distribution
CoEU
€80 €100
Goods are shipped directly to EU
UCC: Customs duty calculated on €100 rather than €80
EUExample
Physical flow
Legal flow
Value of goods for customs purposesChanges under UCC (Union Customs Code)
• The UCC changes this rule to refer to the “Last Sale for
Export”
– Transaction value must be determined based on the sale
occurring immediately before the goods were brought into the
customs territory of the EU
ManufacturerUS
US CoUS
Related Distribution
CoEU
€80 €100
Goods are shipped directly to EU
UCC: Customs duty calculated on €80, but what if goods were already sold to Distribution co before the goods were brought into the customs territory of the EU?
Example
Physical flow
Legal flow
Value of goods for customs purposesChanges under UCC (Union Customs Code)
• The UCC changes this rule to refer to the “Last Sale for
Export”
– Transaction value must be determined based on the sale
occurring immediately before the goods were brought into the
customs territory of the EU
The sale occurring immediately before the
goods were brought into the customs
territory? (I)
• What is a last sale?
• What is a sale?
• Sale vs supply of goods (VAT definition)
• See also Notice on Bona Fide Sales from US customs
The sale occurring immediately before the goods
were brought into the customs territory? (II)
• Broad definition of ‘sale’ (case
Christodoulou, C-116/12) :
44. Since, for the purposes of the customs
valuation, priority is to be given to the transaction
value in accordance with Article 29 of the Customs
Code, that method of determining the customs value
is assumed to be the most appropriate and the most
frequently used.
45 In order to maintain that priority, it is necessary
to interpret the term ‘sale’ in Article 29(1) broadly.
Royalties & License Fees
• Payments in respect of patents, designs,
trademarks, copyrights etc. are added to
the price paid or payable if:– related to the goods being valued (imported)
– The buyer must pay these elements, either directly or indirectly,
as a condition of sale
– If royalties or license fees are paid to a third party, these
payments are currently only considered a condition of sale if the
seller or a person related to the seller requires that payment to
be made
Royalties & License Fees
• Under the UCC, the “condition of sale” requirement is deemed
to be met if:
– The seller or a person related to the seller requires the buyer to
make this payment; or
– The payment by the buyer is made to satisfy an obligation of the
seller, in accordance with contractual obligations; or
– The goods cannot be sold to, or purchased by the buyer without
payment of the royalties or license fees to a licensor.
THANK YOU!
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