Royalties & licence fees

Royalties & Licenses: Understanding Their Customs Impact

Royalties and licenses are payments made for the use of intellectual property rights, such as patents, trademarks, or copyrights, often related to imported goods. When a product is imported, these costs can be added to the customs value, thus influencing the amount of customs duties to be paid.

Why are they added to the customs value?

According to international customs rules, notably those of the World Customs Organization (WCO), royalties and licenses must be included in the customs value if they are a condition of the sale of the imported goods. This means that if the payment of these rights is necessary for the importer to resell or use the goods, they must be taken into account.

How to determine if royalties apply?

1. Check the contract: Examine the terms of your import contract to identify any mention of royalties or licenses.
2. Analyze the conditionality: Assess if the payment is a condition for the purchase or use of the goods.
3. Consult an expert: In case of doubt, it is advisable to consult a customs specialist to avoid costly mistakes.

Practical tips

• Document carefully: Keep all documents related to royalties and licenses to justify their inclusion or exclusion in the customs value.
• Stay informed: Regulations may vary by country, so it is crucial to stay updated on local and international laws.

By understanding and correctly applying the rules related to royalties and licenses, importers can optimize their customs costs and avoid potential penalties.