License Agreement Stamp Duty Singapore: A Guide for Businesses and Individuals
In Singapore, every transaction that involves the transfer of property or assets, such as intellectual property, requires a legal document that establishes the ownership and terms of use. This legal document is commonly known as a license agreement, and it is a crucial component of any business deal or intellectual property transfer.
One important aspect that businesses and individuals need to be aware of when drafting or signing a license agreement in Singapore is the stamp duty. In this article, we will provide a comprehensive guide on license agreement stamp duty in Singapore.
What is Stamp Duty?
Stamp duty is a tax that is payable on legal documents that are used for transactions involving property or assets. In Singapore, the Inland Revenue Authority of Singapore (IRAS) is responsible for collecting stamp duty on various types of legal documents, including license agreements.
License Agreement Stamp Duty in Singapore
In Singapore, the stamp duty that is payable on a license agreement depends on the type of intellectual property that is being transferred. The stamp duty rates are as follows:
Type of Intellectual Property | Stamp Duty Rate
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Patents | $10 for every $500 or part thereof of the consideration
Trade marks | $2 for every $500 or part thereof of the consideration
Registered designs | $2 for every $500 or part thereof of the consideration
Copyrights | No stamp duty payable
For example, if a company is transferring a patent to another company for a consideration of $50,000, the stamp duty payable on the license agreement would be $1,000 ($10 for every $500 or part thereof of the consideration).
It is important to note that the stamp duty must be paid within 14 days from the date of execution of the license agreement. Failure to pay the stamp duty on time can result in penalties and interest charges.
Exemptions and Relief
There are certain exemptions and relief provisions available for stamp duty in Singapore. For example, if the transfer of intellectual property is made as a gift or inheritance, no stamp duty is payable. Additionally, if the transfer of intellectual property is made to a qualifying person, such as a charitable organization or approved educational institution, a reduced stamp duty rate may apply.
Conclusion
In summary, license agreement stamp duty is an important consideration for businesses and individuals involved in the transfer of intellectual property in Singapore. Understanding the stamp duty rates, exemptions and relief provisions can help ensure compliance with the law and avoid penalties and interest charges.
If you need assistance with drafting or reviewing a license agreement, it is recommended that you seek legal advice from a qualified lawyer in Singapore.