With the deepening of global economic integration, Chinese enterprises are increasingly participating in international trade, and royalty payment incidents have become more frequent. Royalties not only directly affect corporate economic benefits but also involve national customs revenue. Therefore, comprehensively understanding the definition of royalties, mastering their taxable conditions, and learning how to correctly declare them have become urgent needs for Chinese enterprises. This paper aims to explore the meaning, taxable conditions, and declaration methods of royalties in depth.

According to the Measures for the Customs of the Peoples Republic of China to Determine the Dutiable Value of Goods, the customs shall determine the dutiable value based on the transaction value. The transaction value shall include the price of the goods and all expenses directly or indirectly paid by the buyer to obtain the goods.import and exportAccording to the Measures for Determining the Customs Value of Goods, royalties refer to fees paid to obtain licenses or transfers of intellectual property rights—such as patents, trademarks, proprietary technology, copyrights, distribution rights, or sales rights—from rights holders or their authorized parties.

Taxation of royalties requires two conditions: first, the royalties must be related to imported goods, and second, the payment of royalties must constitute a condition for the sale of imported goods to China.

In practice, the declaration method for royalty payments depends on the timing of payment. Announcement No. 58 of 2019 by the General Administration of Customs stipulates that regardless of whether royalty fees are already included in the actually paid or payable price of imported goods, enterprises should fill in Yes in the Confirmation of Royalty Payments Related to Goods column. If taxable royalty fees have been paid when declaring imported goods, the paid amount should be reported in the Miscellaneous Fees column of the customs declaration form; if taxable royalty fees have not been paid when declaring imported goods, enterprises should complete declaration and tax payment procedures with customs within 30 days after each payment and fill in the Taxable Royalty Payment Declaration Form.

Many practical issues arise in the declaration and management of royalties. For example, how should enterprises handle periodic royalty payments or cases where royalties were not declared to customs?

For enterprises that pay royalties periodically, they can declare them using the subsequent taxation method for royalties within 30 days after each payment cycle ends.

For cases where royalties were not declared to customs, enterprises must proactively disclose this to customs and pay the relevant taxes as soon as possible. If the declaration date exceeds 30 days from the payment date, a late fee of 0.05% per day will apply starting from the 31st day.

Other potential issues require enterprises to actively communicate with customs and follow prescribed procedures.

In summary, a comprehensive understanding of the definition, taxable conditions, and declaration methods of royalties holds significant practical importance for Chinese enterprises. This paper aims to provide theoretical support and operational guidance for enterprises dealing with royalty-related issues.