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A consultancy firm inquired whether income from products based on secret processes could qualify for the reduction under Article 23 of the Corporate Income Tax Act. The Directorate General of Taxes (DGT) ruled that it cannot, as their contracts constitute a provision of services rather than the licensing of know-how.
This ruling clarifies the distinction between the licensing of intellectual property and the provision of services, preventing taxpayers from applying tax reductions intended for intangible assets to service-based contracts.
The tax team reviews your specific situation.
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