As of January 1, 2018, the license barrier is to be applied to license fees within a group. The license barrier restricts the deduction of operating expenses for license fees to foreign affiliates. In an earlier blog article, we have already described the considerable disadvantages of the license barrier for the taxation situation of internationally active companies in general. In the following, the tax effects are explained using a concrete example, with figures and graphs.
License Payment Abroad – Typical Constellation in Which the License Barrier Limits the Operating Expenditure Deduction
In the video, we explain to you how corporations shift their profits to low-tax countries by granting licenses and thereby save considerable taxes.
1st basis of the example calculation at the license barrier
For the concrete calculation of the disadvantage, the following parameters are assumed:
Licence holder
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.