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HMRC internal manual

Guidance on the Audit of Customs Values

From
HM Revenue & Customs
Updated
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Royalties and licence fees: introduction

The term royalties has been defined in Article 12(2) of the OECD Model Double Taxation Convention on Income on Capital (1977) as meaning ‘payments of any kind paid as a consideration for the use of, or the right to use, any copyright of literary or artistic or scientific work including cinematography films, any patent, trade mark, design or model, plan, secret formula or process, for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience’.

Information, ‘whether capable of being patented or not, that is necessary for the industrial reproduction of a product or process, directly and under the same conditions; in as much as it is derived from experience, know-how represents what a manufacturer cannot know from mere examination of the product and mere knowledge of the progress of technique’.

‘all the undivulged technical information, whether capable of being patented or not, that is necessary for the industrial reproduction of a product or process, directly and under the same conditions; in as much as it is derived from experience, know-how represents what a manufacturer cannot know from mere examination of the product and mere knowledge of the progress of technique’.