One thought on “What should you know about the withholding tax for royalties?

  1. Arti says:

    If you are receiving royalties, those payments might, therefore, have been subject to withholding tax. This involves royalties that arise in the United Kingdom, even in situations where the entity has no taxable presence in the UK. Under the current system, companies making royalty payments in specific areas will need to deduct withholding tax at 20% from those royalties. The payments can arise from a variety of things, from software to music. Royalties are a great additional source of income for many self-employed. In the modern digital economy, a lot of people are getting in on the action even when their bread and butter comes from a fewwhere else. In terms of royalty taxation, you might be aware of the withholding tax on royalties. The Government had an extensive consultation a number of years back to look at the impact of the digital economy, with its ability to sell goods or stream content. The consultation resulted in certain changes, including tweaks on royalty taxation.

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