B. RECEIPTS OF EXPLOITATION OF INTELLECTUAL PROPERTY

摘要

Subject to paragraph 12(1)(g) of the Act discussed below, the treatment under the Act of a receipt received by a taxpayer from a third party for the transfer or granting of rights to use intellectual property of the taxpayer will turn on whether the transfer or granting of rights to the third party occurred on income account or capital account. Where the transaction occurred on income account, the taxpayer at some point will be required to include the receipts in the computation of its income, pursuant to the requirement to include in income its profit from a business or property of the taxpayer. Where the transaction occurred on capital account, it is likely that the taxpayer either will be considered to have disposed of a depreciable property giving rise to recapture of depreciation or a terminal loss, and potentially also to a capital gain, or to have disposed of an eligible capital property, giving rise to the receipt of an eligible capital amount.