IRS Tax Treaty Table 1, footnotes tt and yy: software takes the copyright rate, and contingent sale gains are royalties (IRS, Table 1 (Rev. May 2023), footnotes tt and yy)
Source code licensed to a US buyer takes the copyright column. A payment that depends on how the buyer uses the data is still a royalty even if the deal is written as a sale.
Dated 18 Oct 2026Source checked 18 Oct 2026Basis: primary text
In the source's own words
“Unless the treaty, technical explanation to the treaty, or any relevant competent authority arrangement provides otherwise, the copyright tax rate provided in column 12 applies to royalties for computer software. ... In general, royalties include gains derived from the alienation of property covered by the Royalty article to the extent such gains are contingent on the productivity, use, or disposition of such property.”
Where it was read
Also read from the same source
- IRS Tax Treaty Table 1: treaty withholding rates on income other than personal service income (IRS, Table 1. Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and Income Tax Treaties (Rev. May 2023), page 1)
- IRS Tax Treaty Table 1: countries without a treaty pay 30 percent on royalties (IRS, Table 1 (Rev. May 2023), row Other Countries)
- IRS Tax Treaty Table 1, royalty row for Canada (IRS, Table 1 (Rev. May 2023), Canada row, royalty columns (income codes 10 to 12))
- IRS Tax Treaty Table 1, royalty row for United Kingdom (IRS, Table 1 (Rev. May 2023), United Kingdom row, royalty columns (income codes 10 to 12))
- IRS Tax Treaty Table 1, royalty row for Germany (IRS, Table 1 (Rev. May 2023), Germany row, royalty columns (income codes 10 to 12))
- IRS Tax Treaty Table 1, royalty row for France (IRS, Table 1 (Rev. May 2023), France row, royalty columns (income codes 10 to 12))
Figures it counts in
It is shown on its own, not counted into a figure.
Cited in this guide