1. Royalty income includes the following:
(1) Income from providing patents, copyrights and other franchise rights for others to use;
(2) Income from the transfer of patent rights, copyrights and other franchise rights. The income from remuneration is different from the income from royalties, and the income from providing copyright use rights does not include royalties.
2. Legal basis:
Article 19 of the Enterprise Income Tax Law of People's Republic of China (PRC)
When a non-resident enterprise obtains the income specified in the third paragraph of Article 3 of this Law, it shall calculate the taxable income according to the following methods:
(1) Income from dividends, bonuses and other equity investments, as well as interest, rent and royalties, shall be regarded as taxable income in full;
(2) For the income from the transfer of property, the taxable income shall be the balance of the net value of the property after deducting all expenses;
(3) For other income, the taxable income shall be calculated by referring to the methods specified in the preceding two paragraphs.
2. What are the characteristics of royalties?
The characteristics of royalties are as follows:
1. The income from providing the right to use copyright does not include the income from remuneration;
2. The income obtained by the public auction of the original or photocopy of the author's written work belongs to the income obtained from the use of copyright, and personal income tax shall be levied according to the items obtained from royalties;
3. When individuals obtain economic compensation income from franchising, they shall pay individual income tax according to the tax items of royalties, and the tax shall be withheld and remitted by the unit or individual who pays compensation.