12 October 2020

IPSTYLE advised the client on software licensing and sublicensing

IPStyle's client is the Ukrainian division of a European multinational company that provides digital energy and automation solutions for efficiency and sustainability.

The client had a number of questions about the procedure of software licensing and sublicensing and the tax aspect of such relationships.

In the interest of the client, we provided advice on:

  • determining whether or not the payment under the draft license agreement is royalty;
  • determining opportunities to prevent the recognition of payment under the draft license agreement as a royalty and, accordingly, its recognition as a means of payment for the supply of software products;
  • determining the possible risks of not recognizing the sub-licensor as the "beneficial owner of the income".

This case study is a successful example of our business-oriented approach to client projects and goals and finding solutions focused on profit maximization.

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