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Intellectual property rights company scheme

TAXATION AT THE REDUCED RATE OF 10% FOR MOST REVENUES FROM INTELLECTUAL

PROPERTY RIGHTS

The reduced rate of 10% is applicable to the net earnings from the concession or sub-concession of operating licenses for the

following:

NB: This reduced rate applies irrespective of any dependencies between the parties or the holding period.

The reduced rate of 10% applies to capital gains from the disposal of these elements, with the exception however of items acquired

against payment within a period of less than two years.

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TAXATION AT A FIXED RATE OF €125 FOR ACTS EVIDENCING THE SALE OR LICENSING

OF SUCH INTANGIBLE RIGHTS

If these acts are subject to registration, the sale or concession of operating licenses mentioned above just gives rise to a fixed fee of €125.

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ABSENCE OF ANY WITHHOLDING TAX ON ROYALTIES FROM SAINT-MARTIN BASED

SOURCES PAID TO NON-RESIDENTS

Royalties paid to beneficiaries resident outside Saint-Martin do not give rise to the application of any withholding tax at the time of payment.

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POSSIBILITY OF OFFSETTING WITHHOLDING TAX LEVIED ABROAD EVEN IN THE

ABSENCE OF A TAX TREATY

A company collects during the year ended 31 December N royalties that are eligible for the reduced rate of 10%, according to the following

table:

Country

of origin

Gross

amount

(1)

Tax levied in the

country of origin

(2)

Net income

(3)

Saint-Martin tax on income

(4)

Tax credit applied to corporate tax due in Saint-Martin

On corporate tax due

for the year N

(5)

On corporate tax for the

following years

(6)

Country A €400 000

€60 000 €

€340 000 €

€40 000

€400k x 10%

€28 000

€12 000

Country B €600 000 €

€120 000 €

€480 000 €

€50 000

(€600k - €100k) x 10%

€35 000

€15 000

Country C €200 000 €

€10 000 €

€190 000 €

€5 000

(€200k - €150k) x 10%

€3 500

€1 500

Comments:

Column 4 :

the amount of tax credit is in any event capped at the amount of Saint-Martin tax levied on the taxable income in question (difference

between, on the one hand, the gross amount mentioned in column 1 and, on the other hand, expenses deductible from income under Saint-Martin

domestic legislation such as management expenses, the cost of studies, fees paid for sub-licensing, etc.).

Column 5

and

Column 6 :

Tax deducted at the source in the foreign country, capped if appropriate (see Col 4), is offset for up to 70% of the amount

of corporate tax due under the year N; the balance (30%) increased, if appropriate, by the fraction that could not be offset under the year N, is carried

forward to following years indefinitely and for an unlimited amount

FOCUS ON

- Patents, patentable inventions;

- Improvements made to patents and

patentable inventions;

- Manufacturing processes;

- Certificates of plant variety;

- Trademarks and service marks;

- Drawings and models;

- Copyright for literary, artistic or

scientific works including cinema

films;

- Copyright for objects produced using

3D printing technology

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BUSINESS TAXATION

DOING BUSINESS IN SAINT-MARTIN