Royalty income shall be recognized according to the date when the concessionaire pays the royalties as agreed in the contract. Franchise fees for equipment and other tangible assets are provided, and income is recognized when assets are delivered or ownership of assets is transferred; Royalties for providing initial and follow-up services are recognized when providing services.
When applying for membership or joining a member, only membership is allowed. If all other services or goods are charged separately, the income will be recognized when the membership fee is obtained.
After applying to become a member or joining a member, a member can obtain various services or commodities without paying fees during the membership period, or sell commodities or provide services at a price lower than that of a non-member, and the membership fee is confirmed by stages throughout the benefit period.
Legal basis: Items (4) and (7) of Article 2 of the Notice of State Taxation Administration of The People's Republic of China on Several Issues Concerning the Confirmation of Enterprise Income Tax (Guo [2008] No.875) belong to the royalties for providing tangible assets such as equipment, and the income is recognized when the assets are delivered or the ownership of the assets is transferred; Royalties for initial and subsequent services are provided, and revenue is recognized when services are provided.