Patent royalties are subject to personal income tax. According to the relevant laws and regulations, royalties belong to royalties, and personal income tax should be calculated and paid according to the "royalties" item, which should be merged into comprehensive income for annual settlement.
Legal objectivity:
Generally speaking, employees do not need to pay personal income tax when they get economic compensation, but when the amount of economic compensation exceeds a certain amount, they must pay personal income tax. Economic compensation is the economic compensation given to workers by the employer when the labor contract is terminated. Economic compensation is a one-time economic subsidy paid by the employer to the workers after the termination of the labor contract. China's law is generally called "economic compensation", French labor law is called "dismissal compensation", and Russian labor law is called "dismissal payment". China's Labor Law, Economic Compensation Measures for Violation and Termination of Labor Contract (hereinafter referred to as Economic Compensation Measures) issued by the Ministry of Labor 1994 and other laws and regulations stipulate that when the employer and the employee terminate the labor contract, they shall pay a certain amount of economic compensation in one lump sum according to certain standards. According to the relevant documents of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC), individual income tax shall be paid according to the law for the one-time compensation income (including economic compensation, living allowance and other subsidies paid by the employer) obtained by individuals due to the termination of labor relations with the employer. To sum up, these regulations should be handled according to the following three situations: 1, the part whose income is less than three times the average salary of local employees in the previous year is exempt from personal income tax; 2. Personal income tax calculation method for more than 3 times: one-time economic compensation income after deducting 3 times ÷ individual's working years in this enterprise = individual's monthly salary for tax payment. Then, based on the monthly salary of individual tax payment, individual income tax is calculated and paid according to the relevant provisions of the tax law. The individual's working years in this enterprise are calculated according to the actual working years, and those exceeding 12 are calculated according to 12. The personal income tax calculated according to the above method shall be withheld and remitted by the paying unit at the time of payment and turned over to the state treasury within 7 days of the following month. 3. The housing provident fund, medical insurance, basic old-age insurance and unemployment insurance funds actually paid by individuals according to the proportion stipulated by the state and local governments shall be deducted when calculating taxes.