Royalty and Fee for Technical Services (FTS) under DTAAs

Technology, connectivity, and intellectual property being central to the globalized services-led world of modern business, royalty payments and fees for technical services (FTS) are a routine but significant transaction items for organizations today. They also involve many complexities of cross border Intellectual Property Rights (IPR) such as whether and how they are covered within the Double Tax Avoidance Agreements (DTAAs) with countries, how terms like ‘FTS’ or ‘copyright’ are defined, the heads under which services, payments and incomes are to be characterized, and so on. And that is only naming a few among many complexities!

At MBG Corporate Services, our experts are experienced and well versed in these complexities and are able to guide you through the process with:

• Advice on what constitutes Royalty and Fee for technical services (FTS) under the GCC Income Tax Laws and its interplay with Double Tax Avoidance Agreements (DTAAs)
• Advice on Withholding tax (WTH) obligations
• Advice on the Dos and Don’ts to avoid Royalty and FTS being connected with Permanent Establishment (PE), wherever possible
• Advice on lower tax rates under DTAAs wherever applicable, and possible exemptions thereof