U.S. And Mexico | Trademark Royalties And Tax Considerations

Trademarks: Tax implications in the U.S. & Mexico

Approximately 30% of the global market is related to intellectual property. While intangible goods cannot be touched or seen, they are all too real. For companies around the world, one of the most important intangible assets for trading are Trademarks.

In practice, owners of Trademarks often generate income by licensing their trademarks to other parties.  The owner is referred to as a “licensor.”  The other party, referred to as the “licensee,” pays “royalties” to the licensor for use of the Trademark.

Investors often come to Mexico seeking out foundational legal advice concerning the incorporation of a Mexican company. But they should not overlook tax planning in connection with their Trademarks. However, the failure to engage in proper tax planning with respect to intangibles may leave much on the table.  Indeed, royalty payments are often an alternative to repatriating capital.

This article provides a general overview of the tax implications in connection with cross-border use of Trademarks and their implications for U.S. tax residents investing in Mexico.

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Are you one of the more than 1 million expats living out your golden years in Mexico? Social Security and pension checks certainly go far in this tropical paradise, but there are two important things for US expats in Mexico to remember to do in the spring of each year: file a US tax return, file a Mexican tax return. You want to stay tax compliant no matter where you choose to spend your time. Read More

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