Extended material use fee, also known as royalty, is the monetary benefit collected by the creator or copyright owner of intellectual property rights from others who use their intellectual property rights. People who use intellectual property rights such as copyrights, franchises, copyrights, trademarks and patents may have to pay royalties. Generally speaking, in order to obtain the right to copy or perform a work, money will be paid to the inventor or creator of the work as a royalty.
Copyright royalties are a kind of income of copyright owners. In most countries, this income must be taxed in the form of withholding income tax. If it is a book, the unit price of the book is multiplied by a certain percentage and then multiplied by the sales volume or printing volume of the book. This percentage is called royalty rate, and its size reflects the level of royalty standard. No matter in most countries or internationally, there is no uniform standard for royalties. The determination of edition tax rate generally takes into account the author's popularity, the type, quality and print run of the work, the potential market demand and the exclusive degree of the rights granted, and the author, copyright owner or his agent reach an agreement with the users of the work through consultation. The standard and payment method of royalties need to be determined by the owner and user of the copyright of the work through oral or written agreement. If it is a book, in general, before the work is officially published, the publishing house must pay part of the royalties to the author. This part of royalties is called prepaid royalties. Royalties in advance can be paid after the contract is signed, the work is submitted or the sample book is printed.
Income from royalties refers to the income obtained by individuals from providing the right to use patents, trademarks, copyrights, non-patented technologies and other franchises. The income from providing the right to use copyright does not include the income from remuneration. If the individual's income from each royalty does not exceed 4,000 yuan, the expenses of 800 yuan can be deducted; If the income exceeds 4,000 yuan each time, 20% of the expenses can be deducted, and the balance is taxable income. Royalty income is subject to the tax rate of 20%. The calculation formula is: personal income tax payable = taxable income ×20%.