Thursday, September 15, 2011

FEE FOR USER OF SOFTWARE TAXABLE AS ROYALTY - ITAT BANGALORE

From a plain reading of the definition of 'royalty' given in Article 12(3) of DTAA between India and
Switzerland, it is clear that any payment made for the use of or right to use of the properties mentioned there in would be royalty. We find that both the definitions are similar and encompass the payment for 'the use of and the right to use of' any intellectual property mentioned therein such as copyright of a literary, artistic or scientific work or any patent, trade mark, design or model, plan etc.. Thus, the license granted by Oracle Data Base for use of its software by the assessee company constitutes royalty.

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