The International Trademark Association (INTA) released its Report on the Taxation of Trademarks and Complementary Rights in Europe. Focused on the tax implications within the trademark lifecycle in the European Union, the United Kingdom, and Switzerland, the report serves to provide brand legal practitioners with a clear understanding of tax policy as it relates to trademark and complementary rights issues, and a framework to strengthen their collaboration with tax professionals.
Looking at the roles of trademark and tax professionals, respectively, the report illustrates how the two groups can foster a more productive and collaborative relationship through the trademark lifecycle.
“There can be a lot of tension if the tax and the trademark attorneys are not talking early in the process. I would encourage trademark attorneys to engage with tax professionals and the accounting profession continually,” said Jeff Marowits, president, client services at Keystone Strategy (US), a member of INTA’s Research Advisory Council, Global Transactions and Tax Subcommittee, and a lead author of the report.
The report’s other lead author, Scott Phillips, managing director at Epsilon Economics (US) and a member of INTA’s Research Advisory Council, noted: “Trademark professionals and tax professionals often use ownership in two different senses, without really knowing it until they get involved.”
Recognizing the need to reconcile the different views of trademark and tax practitioners on trademark-related issues, the report sheds light on the various nuances that should be considered when determining the taxation of trademarks. For example, even if trademarks are defined as assets, they will not be recognized as assets on the tax or accounting balance sheets unless acquired or transferred.
The report also compares the tax implications of licensing and trademark transfer, discusses how royalty payments are taxed, and provides an overview of projected trends in the EU.
With its broad application, the report supports two out of the three strategic pillars of INTA’s 2022–2025 Strategic Plan: to support the development of IP professionals, and to promote and reinforce the value of brands.
In recent years, INTA has focused on the evolving role of trademark practitioners into brand professionals—or from specialist to generalist. This involves both expanding one’s substantive knowledge and establishing more effective relationships with internal stakeholders, including colleagues in finance and accounting. This report provides brand professionals with a solid foundational understanding of the tax issues linked to trademarks and complimentary rights, sufficient to know when to think about such issues and when to contact tax specialists.
The report was announced during INTA’s 2022 Annual Meeting Live+, taking place virtually and in person in Washington, D.C., April 30 – May 4. INTA’s Research Advisory Council and Commercialization of Brands Committee collaborated on the report, and an INTA Project Team partnered with PricewaterhouseCoopers (PwC) to prepare the report. It is available online to INTA members as an exclusive members-only benefit.
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