Does income from technology transfer belong to other business income?

In the process of business development of enterprises, the occurrence of the transfer of patent rights or computer software copyrights and other business income, is it other business income?

Is technology transfer income other business income?

Technology transfer income is non-operating income.

Technology transfer income is generally the transfer of ownership of technology, belonging to the category of intangible asset transfer. Generally recognized as non-operating income or gain on disposal of assets. In the case of business activities such as the alienation of the right to use patented technology, it is included in other operating income.

Non-operating income refers to all kinds of income that is not directly related to the production and operation activities of the enterprise, also known as "non-operating income", is a kind of pure income, without the enterprise to pay the price.

Other business income refers to the income from the main business of the enterprise other than all through the sale of goods, the provision of labor income and the transfer of the right to use assets and other day-to-day activities of the inflow of economic benefits, generally other business activities of the income is not large, the frequency of other business activities is also not high.

Income from technology transfer: Income from technology transfer refers to income derived from the transfer of patents (including defense patents), computer software copyrights, exclusive rights to integrated circuit layout designs, rights to new plant varieties, new varieties of biomedicine and other technology ownership or use rights as determined by the Ministry of Finance and the State Administration of Taxation.

Does technology transfer income pay VAT?

Technology transfer income is exempt from VAT.

According to the Circular of the Ministry of Finance and the State Administration of Taxation on Comprehensively Pushing Forward the Pilot Program of Changing Business Tax to Value-added Tax (Cai Shui [2016] No. 36), Annex 3, "Provisions on Transitional Policies for the Pilot Program of Changing Business Tax to Value-added Tax": the following items are exempted from value-added tax: (xxvi) Taxpayers' provision of technology transfer, technological development, and technical consultation and technological services related to them.

1. Technology transfer and technology development refer to business activities within the scope of "transfer of technology" and "research and development services" in the Notes on Sales of Services, Intangible Assets or Real Estate. Technology consulting, refers to specific technology projects to provide feasibility studies, technology forecasts, thematic technology surveys, analysis and evaluation reports and other business activities.

2. Filing Procedures. Pilot taxpayers applying for VAT exemption shall hold the written contract of technology transfer and development to the provincial science and technology authorities where the taxpayers are located, and hold the relevant written contract and the documents certifying the examination and approval opinions of the science and technology authorities and report them to the competent tax authorities for record.

Therefore, if the enterprise applies for the filing procedure of technology transfer exemption of VAT according to the regulations, it can enjoy the preferential treatment of VAT exemption; if it does not do so, the income obtained after technology transfer needs to be paid VAT according to the sale of "intangible assets - technology transfer".