{"id":232,"date":"2012-11-13T17:31:39","date_gmt":"2012-11-13T17:31:39","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=232"},"modified":"2025-02-12T13:29:34","modified_gmt":"2025-02-12T21:29:34","slug":"cra-considers-cross-border-fees-for-software-distribution-rights","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2012\/11\/cra-considers-cross-border-fees-for-software-distribution-rights\/","title":{"rendered":"CRA considers cross-border fees for software distribution rights"},"content":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2012\/11\/2011-0427181E5.pdf\">2011-0427181E5<\/a> (released October 17, 2012), the CRA considered whether a non-resident company would be subject to withholding tax in Canada on a bundled &#8220;licence fee&#8221; payment from a company resident in Canada in respect of certain computer software rights.\u00a0 The licence fee comprised the following components: (1) a payment for the exclusive right to market and distribute custom computer software in Canada, (2) a payment for the right to sublicense to end-users in Canada the right to download and use the custom computer software, and (3) a payment for ongoing software upgrades and support of the custom computer software through the non-resident company\u2019s website and telephone lines.\u00a0 The CRA confirmed that the payments in (1) and (2) would be exempt from 25% withholding tax in Canada under s. 212(1)(d)(iv), as \u201ca royalty or similar payment on or in respect of a copyright in respect of the production or reproduction of any literary work\u201d.\u00a0 In this respect, the decision in <em>Syspro Software Ltd. v The Queen<\/em> (2003 TCC 498) was cited as authority for a broad reading of this exemption: namely, as encompassing any right \u201cconnected with\u201d the basic right to produce or reproduce the software \u2013 including the right to distribute.\u00a0 The CRA also confirmed that 15% withholding under Regulation 105 would not be required in respect of the services mentioned in component (3) because those services were not rendered in Canada.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2012\/11\/2011-0427181E5.pdf\">2011-0427181E5<\/a> (released October 17, 2012), the CRA considered whether a non-resident company would be subject to withholding tax in Canada on a bundled &#8220;licence fee&#8221; payment from a company resident in Canada in respect of certain computer software&hellip;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-232","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=232"}],"version-history":[{"count":1,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/232\/revisions"}],"predecessor-version":[{"id":2840,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/232\/revisions\/2840"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}