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UC Law SF Communications and Entertainment Journal

Abstract

Transfer of computer software in the international context presents many complexities. Tension has developed between countries of manufacture and the countries of sale. Specifically, how should the income arising from such transactions and the resulting tax base be allocated between the nations where the purchaser and seller are located? Treasury Regulation 1.861-18 attempts to bring some clarity to the characterization of income from the international transfer of computer software. This note explains this regulation as it concerns the disposition of copyright ownership rights and copyrighted subject matter, as well as explores various tax planning opportunities.

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