Royalty revenue optimization scheme
In case of trade mark registration abroad and subsequent transfer of the trade mark rights to Russian company, it is better that the trade mark owner is offshore company, for example a BVI one. In such a case, offshore company transfer trade mark rights to Hong Kong company, which subsequently transfer them to Russian company.
Such a sequence is required in order to:
- no suspicion in offshore deal
- decreasing tax on royalty revenue in Hong Kong
- decreasing tax at the revenue source place, in Russia
The "Tax Code of the Russian Federation" requires, in case of royalty payment in favor of foreign companies, to pay 20% at the place of earnings. However, double taxes avoiding agreement between Hong Kong and the Russian Federation gives us such taxation for offshore company, which means 0%.
In Hong Kong the tax for revenue (including royalty revenue) is 10%. But Hong Kong company revenue are decreased due to operational expenses pay off in favor of offshore company. Hong Kong taxes in case of offshore company payments are 0%.
|No suspicions in offshore deal|
|No tax payments at sources of tax payments|
|Revenue taxes 10% are not taxable|
|No taxes at sources of royalty|