Details are as follows:
1. Royalty income refers to the income obtained by individuals providing franchise rights such as patents, trademarks, copyrights and non-patented technologies. The income from providing the right to use copyright does not include the income from remuneration. The income obtained from the public auction (bidding) of the original or duplicate of the author's own written work shall be taxed according to the item of remuneration. Income from economic compensation obtained by individuals from franchising shall be taxed as "income from royalties";
2. For the income from royalties, the income from one royalty shall be regarded as one time, and the taxable income shall be the quota or the balance after deducting the prescribed expenses. Royalty income is subject to a proportional tax rate of 20%.
Conditions for revenue recognition:
1. The enterprise has transferred all the main risks and rewards of commodity ownership to the buyer;
2. The enterprise neither retains the right to continue management, which is usually associated with ownership, nor controls the goods that have been sold;
3. The amount of income can be measured reliably;
4. Relevant economic benefits are likely to flow into the enterprise;
5. Related costs that have occurred or will occur can be reliably measured.
To sum up, revenue recognition is a logical judgment problem of whether revenue can be recognized when a business contract is established or during the period, while revenue measurement is a technical method problem of determining the revenue at each time or period. An enterprise shall fulfill its contractual obligations, that is, recognize the income when the customer obtains the control over the relevant commodities.
Legal basis:
Article 2 of the Individual Income Tax Law of People's Republic of China (PRC)
The following personal income shall be subject to personal income tax:
(1) Income from wages and salaries;
(2) Income from remuneration for labor services;
(3) Income from remuneration;
(4) Income from royalties;
(5) Operating income;
(6) Income from interest, dividends and bonuses;
(7) Income from property lease;
(8) Income from property transfer;
(9) Accidental income.
Individual residents who obtain income from items 1 to 4 of the preceding paragraph (hereinafter referred to as comprehensive income) shall calculate individual income tax according to the tax year; Non-resident individuals who obtain income from items 1 to 4 of the preceding paragraph shall calculate individual income tax on a monthly or itemized basis. Taxpayers who obtain income from items 5 to 9 of the preceding paragraph shall calculate individual income tax separately in accordance with the provisions of this law.