Royalty rate benchmarking helper
Test a royalty rate against observed agreements and against licensee profit.
Open itThe allocation key decides who pays what, and three defensible keys can produce three very different charges. This runs headcount, revenue and assets across the same pool at once, so you can see the spread before you commit to one.
The pool and the recipients
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The costs of the services actually provided, excluding shareholder activities and duplicated work.
%
The return on the service provider’s own costs. Low-value-adding services are often charged at a modest fixed mark-up; benchmark yours.
Total charge including the mark-up
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Widest gap between keys, for one entity —
The choice of key changes the answer —
Cost pool—
Mark-up—
First entity—
By headcount—
By revenue—
By assets—
Spread—
Second entity—
By headcount—
By revenue—
By assets—
Spread—
Third entity—
By headcount—
By revenue—
By assets—
Spread—
Fourth entity—
By headcount—
By revenue—
By assets—
Spread—
The pool first, the key second
Most management fee disputes are lost on the pool rather than the key. Costs of activities a shareholder performs for its own benefit — preparing consolidated accounts, meeting the parent's listing obligations, financing the acquisition of a subsidiary — are not services to the subsidiary and do not belong in the pool at all. Nor does work that duplicates something the recipient already does for itself.
Once the pool is clean, the key has to reflect the expected benefit. Headcount suits people-related services such as payroll, human resources and internal training. Revenue suits commercial and marketing support. Assets suit treasury, insurance and property services. A single key applied to a mixed pool is the second most common finding after a dirty pool.
Read the spread before you choose
The spread column is the point of this tool. Where the three keys land close together, the choice barely matters and any of them is defensible. Where they diverge sharply — typically because one entity is labour-heavy and another is capital-heavy — the key is doing real work, and it needs a reason on paper rather than a convention.
A practical answer for a mixed pool is to split it: allocate the people costs on headcount and the commercial costs on revenue, then add the results. Run this twice on the two sub-pools rather than once on the whole.
Worked example
A 1.2 million pool with a modest mark-up, across four entities. India has by far the largest headcount; the United States has the largest revenue and asset base.
- On headcount, India carries most of the charge. On revenue, the United States does. On assets, the United States does by a wider margin still.
- For a single entity the gap between the highest and lowest key runs into six figures on a pool of this size.
- That gap is the amount that has to be justified by the reason for choosing the key, not by the arithmetic.
Set every entity’s headcount equal and the headcount column flattens instantly. That is a useful sanity check on whether the key is measuring benefit or just measuring size.
What this calculator assumes
- The pool you enter is assumed already cleansed of shareholder activities and duplicated work. Nothing here tests that, and it is where most disputes are decided.
- The mark-up is applied to the whole pool before allocation, so each entity bears its share of the mark-up. Some agreements apply it after allocation, which gives the same result on these figures.
- Only three keys are shown. Combination keys, weighted keys and a direct charge for identifiable services are all legitimate and often better.
- A key with a zero total drops out: if no entity has assets, the asset column is nil rather than an error.
An estimate, not advice. This is an estimate built from what you typed, not advice on your file. Nothing here reads your documents, checks your treaty article or looks at the year you are actually in. Where the number matters, we agree a fixed fee in writing before any work starts.
Where these figures come from
- current guidelines OECD Transfer Pricing Guidelines — intra-group services
- current guidance Canada — intra-group services, CRA transfer pricing
- current guidance United States — services regulations overview, IRS
Any figure prefilled in the panel above is stated with the year it belongs to and can be changed. Rates and thresholds move; a calculator that asks you for the current one stays right, and one that hides a guess does not.
Cross-border tax case studies
Case study 1
A Second Opinion on a Return Already Filed
A cross-border return prepared on one side only is usually right in isolation and wrong in combination. The review checks residence, source and relief in that order, and says plainly whether an amendment is worth making.
Read how this one runs
Case study 2
Leaving Canada — the Bill You Get for Assets You Still Own
Emigrating triggers a deemed disposition of most holdings, which produces tax on gains never realised in cash. The file values the property, identifies what is excluded, and looks at whether security can be posted rather than the tax paid outright.
Read how this one runs
Case study 3
A TFSA That Costs More Than It Saves
Canadian tax-free accounts are not tax-free to a US person, and some of them carry a reporting form of their own. The file is a review of what is held, what each account triggers on the US side, and whether the account is worth keeping once the reporting is priced in.
Read how this one runs
Case study 4
A Non-Resident Estate Holding US Assets
US situs assets sit inside the US estate tax net regardless of where the owner lived, and the exemption available to a non-resident is not the resident one. The file establishes situs asset by asset before any relief is claimed.
Read how this one runs
Case study 5
Social Security Paid Twice Until a Certificate Arrived
Income tax relief does not reach a social security charge; only an agreement does, and only against a certificate from the system actually being paid into. Obtaining it is the work, and it is often retrospective.
Read how this one runs
Case study 6
Canadian Dividends and Interest Paid to a Non-Resident
Flat withholding applies at source whether or not a return would produce the same figure. The engagement establishes treaty entitlement, files what is needed to claim the reduced rate, and recovers what went out at the domestic rate.
Read how this one runs
Case study 7
Withheld at the Statutory Rate When a Treaty Rate Applied
Where withholding has already gone out at the full domestic rate, the treaty rate is recovered rather than applied. The file establishes entitlement for each payment, then puts the documentation in place so the following year runs at the correct rate from the start.
Read how this one runs
Case study 8
The Local File That Has to Match the Accounts
A local file describes the entity's own controlled transactions and ties them to its statutory figures. Where the two do not reconcile, that is what an examiner opens with.
Read how this one runsAll case studies — every published engagement in one place.
Core International & Cross-Border Tax Services
International Tax Planning & Advisory
Strategy and compliance for income, assets and families spread across borders.
One coordinating team: filings on every side of the border are sequenced so treaty relief and foreign tax credits are claimed once — and in the right country.
U.S. & Cross-Border Tax Returns
Dual filers: U.S. citizens in Canada and Canadians with U.S. income run two parallel systems — we prepare both, in the right order, every year.
Expat & Emigration Tax
The move year is its own project: the elections and valuations filed that year decide the next decade of both countries’ returns.
Non-Resident Canadian Tax
Default withholding is 25% of gross: elective returns routinely turn over-withheld rent and pensions into refunds.
Transfer Pricing & BEPS
Documentation prepared with the return is the cheapest insurance in international tax; reconstructing it during an audit is the most expensive.
Tax Treaties & Withholding
Relief is only as good as the paperwork claiming it — we build treaty positions that survive review on both sides.
Cross-Border Estates & Trusts
Wills drafted for one country routinely misfire in the other — deemed disposition here, estate tax there, credits in between.
Global Investments & Reporting
Information returns carry the sharpest penalties — $25 a day whether or not any tax is owing. We keep them clean and on time.
Cross-Border Corporate Tax
Expansion raises the same four questions every time — entity, PE, repatriation, payroll. We answer them before the tax authorities do.
India Tax for NRIs & Returning Residents
The deduction is taken on the sale price, not the gain — which is why an NRI property sale strands cash unless the certificate is applied for before closing.
Canadian Tax with a Foreign Element
Residency is decided on facts, not on a form — and the year you arrive or leave is the one where the largest amounts turn on the smallest details.
UAE Tax for Expats & Their Home Country
A zero-tax country is only half the answer — the question that decides the bill is whether the country you came from still treats you as resident.
Industries & Client Types We Serve Worldwide
Global E-commerce & Marketplaces
Technology & SaaS
Professional Services Firms
Cross-Border Real Estate
Importers, Exporters & Manufacturers
Athletes, Artists & Entertainers
Remote Workers & Digital Nomads
Investment Funds & Holding Companies
Global E-commerce & Marketplaces
- Foreign VAT / GST / sales tax registrations
- Marketplace withholding reviews
- Inventory nexus & PE analysis
- Multi-currency books reconciled
Who We Serve:
Technology & SaaS
- Cross-border revenue sourcing & withholding
- IP structuring with real substance
- Equity for cross-border teams
- U.S. expansion: entity & PE setup
Who We Serve:
Professional Services Firms
- Reg 105 / 102 waivers
- Permanent establishment risk
- Partner mobility planning
- Cross-border withholding recovery
Who We Serve:
Cross-Border Real Estate
- Section 216 rental returns
- FIRPTA withholding recovery
- Section 116 clearance
- Treaty credit optimization
Who We Serve:
Importers, Exporters & Manufacturers
- Transfer pricing documentation (s.247)
- Customs value vs transfer price
- Foreign affiliate reporting (T1134)
- Country-by-country reporting
Who We Serve:
Athletes, Artists & Entertainers
Performance income is taxed where earned — Regulation 105 in Canada, withholding agreements in the U.S. — with special treaty articles overriding the usual rules.
Performance income is taxed where the performance happens, and the deduction is usually taken at source on the gross fee before expenses. Recovering the difference is a filing exercise in the other country, and it only works if the tour, the residency and the withholding certificates were documented while the work was being done.
- Reg 105 & U.S. CWA agreements
- Multi-state & country calendars
- Touring income allocation
- Royalty & image-rights withholding
Who We Serve:
Remote Workers & Digital Nomads
- Residency analysis before moving
- Employer payroll exposure
- Totalization & social security
- Foreign tax credits
Who We Serve:
Investment Funds & Holding Companies
- Treaty access & PPT reviews
- FAPI & surplus computations
- Withholding-efficient routing
- Governance & substance
Who We Serve:
