Corporation Tax Act 2010 section 357NH

Payments and receipts in respect of intangible assets

Section 357NH sets out how payments and receipts relating to intangible assets are treated when calculating the profits of a Northern Ireland Regional Establishment (NIRE), specifically disallowing internal royalty payments and receipts between the NIRE and the rest of the company.

• Internal royalty payments from the NIRE to other parts of the same company for the use of intangible assets (such as trade names, brand names or intellectual property) are not allowed as deductions in calculating NIRE profits.
• Contributions made by the NIRE towards the costs of creating an intangible asset are allowed as deductions, and external payments (such as royalties paid to third parties under licence agreements) may also be attributed to the NIRE where they relate to its business activity.
• Internal royalty receipts from other parts of the company for the use of intangible assets held for NIRE purposes are not brought into account as income in the NIRE profit calculation, but contributions received by the NIRE towards the costs of creating an intangible asset are included as receipts.
• An intangible asset is defined broadly to include any intellectual property and otherwise carries its ordinary accounting meaning.