Without permission, no unit or individual may use franchising to seek benefits for themselves. Only when the franchise owner agrees to transfer or allow the use of the franchise and pays a certain royalty can the franchise be used.
Therefore, the royalty income is the exclusive income of the franchisor, and it is also an integral part of the taxable income of units and individuals.
Extended data:
1, intangible transaction object
Franchise transactions involve a large number of intangible goods, including technology, intellectual property rights, digital products and other intangible goods. Invisible trade objects mean that they are separated from physical imports.
2, the wisdom of life
Franchising comes from intellectual or natural achievements, and creativity is the source of intrinsic value of products. Whether it is trademarks, patents, know-how or copyrights, it is the embodiment of wisdom and creativity.
3. Used for replication or service.
As far as the transaction purpose is concerned, the distinctive feature of franchise transfer is that it has obvious commercial purpose of copying products or services. Transactions limited to personal use are generally not defined as royalties.
4. Complex transaction pricing process
Because most products, such as technology and knowledge, have their own uniqueness, and there are no similar products in the market for reference, it is difficult to determine the pricing of products. Therefore, the customs valuation of franchise is more complicated.
References:
Baidu encyclopedia-royalty income