U.S. Furniture Brands Paying Royalties to an Overseas Parent: 30% or 10% Withholding, and Do Royalties Belong in Customs Value?
Royalties a U.S. company pays a foreign affiliate for trademarks, brands or designs used in the U.S. are withheld at 30% by statute, usually 10% for a Chinese parent with a W-8BEN-E, and 30% for Hong Kong or Vietnamese companies. Royalties also drive transfer pricing, deduction timing and Form 5472, and when they are a condition of sale they may belong in customs value.
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