EXPLANATORY STATEMENT
1987 No. 218
BOUNTY (COMPUTERS) ACT 1984
BOUNTY COMPUTERS REGULATIONS (AMENDMENT)
ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR SCIENCE AND SMALL BUSINESS
The attached Regulation has two purposes:
(i) to clarify the meaning of the term “royalties” within Regulation 3 of the principal regulations by inserting particular costs which shall be understood as being within that term, and
(ii) to ensure that amounts paid or credited as “royalties” costs are not considered part of the factory cost incurred in connection with processes in the manufacture of bountiable computer ‘equipment; the result being that such costs shall not be included in the calculations of costs on which bounty is payable.
Background
A bounty is payable under the Bounty (Computers) Act 1984 (‘the Act’) on the manufacture of particular computer equipment. Under paragraph 6(5)(z) of the Act certain factory costs are not to form part of the permissible costs for the purposes of calculating the amount of bounty payable and under Regulation 3 of the principal regulations, “royalties” are prescribed to be excluded for that purpose.
Some companies have recently sought to include commercial “license payments” with respect to the exchange of information or the use of industrial technology as part of the permissible costs on which bounty is payable, and have therefore argued these costs are outside the “royalties” exclusion. It has been the consistent policy objective of the regulations however, to include such payments within the term “royalties” and thus exclude them from consideration for bounty calculation purposes.
The Regulations seek to clarify what costs are intended to come within the “royalties” exclusion, by specifying particular circumstances and costs which shall be considered “royalties”.
The Regulations provide as follows:
Regulation 1 provides for the Regulations to come into operation on the first of a month (ie. 1 October 1987) a date suggested for the commencement to assist with bounty calculations from an accounting point of view.
Regulation 2 provides as follows;
• | Subregulation (2) | provides that the term “royalties” includes any payment, however described and irrespective of the frequency of such, which is made as consideration for; |
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| - the use or right to use particular copyrights, patents etc. (ie. intellectual property) subregulation (2)(a); |
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| - the use or right to use industrial, commercial or scientific equipment subregulation (2)(b); |
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| - the supply of scientific, technical, industrial or commercial information. This covers manufacturing data which may be used in the country, but may be supplied from overseas at a given charge subregulation (2)(c); |
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| - the supply of any assistance associated with matters covered in sub-regulation (2)(a), (b) and (c) subregulation (2)(d); or |
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| - the total or partial suspension of a liability in relation to rights or property or the supply of information within the terms of the other sub-regulations subregulation (2)(e) |