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SOFTWARE COMPANIES FIND HARD REVENUE RULES DON'T APPLY IN INTERNATIONAL TAX

 SOFTWARE COMPANIES FIND HARD REVENUE RULES
 DON'T APPLY IN INTERNATIONAL TAX
 NEW YORK, July 27 /PRNewswire/ -- International taxes are intricate enough when exporting U.S. goods -- but for an intangible product like software -- it gets downright complicated. And as many software companies expand into global markets, now accounting for almost half of the $100 billion software industry, they're finding that established international tax rules do not easily apply to software, says KPMG Peat Marwick, the leading international accounting and consulting firm.
 "International tax rules were created for traditional industries with hard assets like the automobile or steel industries," explains KPMG Peat Marwick Larry DeLap, national director for high technology tax services. "As a result, U.S. companies that license software across borders have to really understand the ins-and-outs of local tax rules to maximize savings."
 Although the tax and business climate differs in each country, DeLap advises U.S. software companies to look for tax advantages that exist in some countries but not others. Among the tax issues that U.S. software companies should consider are:
 -- withholding taxes applicable to a non-resident licensor;
 -- indirect taxes (value-added-tax) levied on royalties;
 -- the tax treatment of research and development expenditures in that country;
 -- research tax credits or other tax incentives to the creation of software;
 -- tax deductibility of the payment in the hands of the resident licensee, and
 -- the treatment of foreign taxes incurred by the licensor in his/her country of residence.
 KPMG Peat Marwick has prepared "Taxation of Cross-Border Software Licensing," a booklet examining tax legislation -- and offering strategies -- for the transfer of computer software by licensing across borders in 14 countries. If you would like to obtain a copy of the book, please write to KPMG Peat Marwick's Distribution Center, 3 Chestnut Ridge Road, Montvale, N.J. 07645.
 Through 135 offices in the United States, KPMG Peat Marwick provides industry-specific accounting, taxation and consulting services to a broad range of businesses and other organizations in the financial, commercial and service sectors. KPMG has more than 76,000 people worldwide and operates in 125 countries.
 -0- 7/27/92
 /CONTACT: Beth De Lisi of KPMG Peat Marwick, 212-909-5128/ CO: KPMG Peat Marwick ST: New York IN: FIN SU:


SH-PS -- NY037 -- 3432 07/27/92 10:41 EDT
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Publication:PR Newswire
Date:Jul 27, 1992
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