Use of the trademark in the economic activity in accordance with Clause 2 of Art. 157 of the Commercial Code of Ukraine, in addition to the aforementioned, is also the use of it in advertising, printed publications, signs, during the display of exhibits at exhibitions and fairs held in Ukraine, in prospectuses, invoices, forms and other documentation, with the introduction of these goods and services in economic (commercial) circulation.
According to Clause 4 of Art. 16 of the Law of Ukraine "On the Protection of Rights to Trademarks for Goods and Services" the use of the mark is recognized:
- placing it on any product for which the mark is registered, a package containing such a product, a sign, associated with it, a label, a stylus, a tag or other item attached to the product, the storage of such a product with the indicated sign for the purpose offering for sale, offering it for sale, sale, import (import) and export (export);
- application of it during the offering and provision of any service for which the mark is registered;
- use it in business documentation or in advertising and on the Internet.
From the point of view of the tax risks of using the trademark on a royalty-free basis, then, according to the auditors, they are insignificant: from 01.01.2015 the object of taxation of income tax is determined according to the rules of national (international) accounting standards (paragraph 1. Article 134.1 of the Code of Civil Procedure), namely PSAS No. 15 "Revenue".
In accordance with paragraph 20 of the above standard, income that results from the use of assets of an enterprise by other parties is recognized in the form of interest, royalties and dividends, is recognized if:
- the probable receipt of the economic benefits associated with such an operation;
- income can be reliably estimated.
Such income should be recognized in the following order:
- interest is recognized in the reporting period to which they belong based on the basis of their calculation and the term of use of the relevant assets, taking into account the economic content of the relevant agreement;
- royalties are recognized on an accrual basis in accordance with the economic content of the relevant agreement;
- dividends are recognized in the period when the decision to pay them is made.
In the absence of an agreement to pay royalties for a trademark and, accordingly, the grounds for recognizing income, such income is not recognized by the enterprise.
Income is recorded in the accounting for the fair value of the assets received or receivable.
If a asset received free of charge provides for the receipt of economic benefits over several reporting periods, the income is recognized on a systematic basis (for example, in the amount of accrued depreciation) during the reporting periods when the relevant economic benefits are received. In our opinion, such risks of determining the fair value of assets by DPS bodies are not significant. As far as the risk of VAT is concerned, it is, in the opinion of the auditor, very low, since SG 190.1.6 is not subject to tax on value added tax on royalties in cash.
Managing Partner of AKF Business Partners Natalia Zuprik