The UAE Tax Case Study. IP is developed from another IP acquired: Nexus Ratio calculation

One more extract from our IP webinar last week. This group of slides addresses cases where one intellectual property item is acquired to generate another one. Acquisition costs decrease the share of income from IP when applying the 0% corporate tax rate. Should this unfavorable treatment apply to cases where one IP is integrated into another? Practical scenarios are presented on slides 2, 6-8, and the rules for using them as a clue are on slides 3-5. The Irish Tax and Customs authorities' interpretation of similar wording was used to assess opportunities and risks.

The tax authority’s position that ‘much software development does not qualify as R&D activity’ is something to recon with.

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Author: Andrey Nikonov