“Royalties vs business profits: the case of ‘mere’ distribution of software”: the article by our Cristiano Caumont Caimi and Flavio Paccagnella published in Corriere Tributario no. 1/2024.
The article examines the interpretative evolution on the subject of software distribution agreements in light of the most recent clarifications by the Italian Tax Authority, the OECD commentary and the EU principle of copyright exhaustion.
The authors believe that the restrictive position taken by the Italian Tax Authority should be rectified by properly distinguishing software distribution agreements that involve an effective copyright transfer from agreements enabling a mere buy-and-sell of the software (so-called “mere distribution”).
As also held by Assonime, the latter arrangements, in application of OECD principles and European Court of Justice’s guidelines, do not generate royalties, but business income.
Comments are closed