nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2023‒01‒30
two papers chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Taxing Intellectual Property Assets on a Cross- Border Transaction: Application of Mobilia Sequuntur Personam and the Case of India-Mauritius Tax Treaty By M. P. Ram Mohan; Aditya Gupta
  2. In defense of farmer saved seeds By Richard S. Gray

  1. By: M. P. Ram Mohan; Aditya Gupta
    Abstract: Intellectual Property (IP) assets enjoy a unique advantage in tax planning. Owing to their intangible nature and the lack of a physical attribution, IP assets can be methodologically parked to transfer income between tax jurisdictions. In 2016, the Delhi High Court was presented with a dispute where IP assets registered in India were transferred between an Australian and English company through their subsidiary holdings in Mauritius. The question before the Court was which tax jurisdiction, India, Australia or Mauritius, would be entitled to tax the capital gains arising from the transaction. The Court held that if a foreign corporation owns an IP asset, regardless of its registration and use in India, it would be taxed by the jurisdiction of the owner’s residence. Coming to its conclusion, the Indian Court found a legislative vacuum in the Indian Income Tax Act, 1961, and relied on the doctrine of Mobilia Sequuntur Personam to fill the lacunae. The present study examines the relevance of the doctrine in line with precedential guidelines and the international treaty framework. The paper reveals that, either inadvertently or by design, the Indo-Mauritian DTAA creates an instance of double tax exemption of Mauritian-owned, Indian-registered IP assets.
    Date: 2023–01–01
  2. By: Richard S. Gray (U of S - University of Saskatchewan [Saskatoon])
    Abstract: In many countries, farmer saved seed (FSS) competes directly with a highly regulated commercial seed industry that sells certified seed. Opponents to the use FSS argue that it reduces the royalty income for plant breeders and is inferior in quality, which reduces farm profitability. We argue that because farmers have knowledge about field history and the quality of saved seed, they can make profit enhancing decisions to use, or not to use, FSS. We also show that payment of royalties is a matter of intellectual property rights and not directly a function of the use of FSS. Notably, Australia actively promotes the use of FSS for wheat and has some of the highest levels of rates of royalty revenue collection in the world.
    Keywords: Farmer saved seed, Profitability, Revenue
    Date: 2021

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