“Tax regulators are searching for sources of revenue from brands,” Marowits said. “Brands are a key source of revenue for companies, but the taxation of the brand [involves complicated questions such as] where the brand ownership is located, where registration occurs and any inter-company licensing that might occur.”

The report, he says, is part of INTA’s effort to teach and support trademark professionals. “We hope that this series of reports will enable trademark professionals to remain at the table when the tax professionals do.”

Marowits pointed out that, often, tax professionals will be as out of their depth with intellectual property as IP professionals will be with tax law, and that by providing trademark lawyers with this training and information, they will be better equipped to deliver a real impact in their department, and to make inroads in the ongoing attempt to help businesses recognize IP as a profit centre rather than a cost centre.

“Companies can recognize enormous cost savings through the choices we’re making,” he said.

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, DC, 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.

Gregory Glass