On or about 1 Dec 2020, the Inland Revenue Authority of Singapore (IRAS) has published an Income Tax Advance Ruling Summary No. 13/2020 with regards to “Withholding tax on payments made pursuant to license agreement”.
The Subject was whether the consideration paid under certain license agreements fall within section 12 of the Income Tax Act and hence, Singapore withholding tax pursuant to sections 45 and 45A is applicable on the payments.
It was ruled that the consideration paid for the grant of licenses under the license agreements are not subject to Singapore withholding tax pursuant to sections 45 and 45A of the SITA, if the lump sum payments made for the full economic rights in the exclusive, perpetual and irrevocable licences are not income in nature in the hands of the recipients and the payments are not subject to Singapore withholding tax pursuant to sections 45 and 45A of the SITA.
For more information about the ruling, please go to the IRAS website.
Source, IRAS, 3 Dec 2020