How to account for trademark registration costs?

How to account for trademark registration costs?

The specification of your business sometimes involves the marking of your own goods or services.
A trademark serves this function. Its functions also include building the company’s image and brand recognition. A business owner who decides to protect its own trademark is required to pay a fee during its registration. Once registered, your application will appear in the Patent Office Bulletin. Read the article to the end to learn how to account for the cost of trademark registration.

The cost of your own trademark

There are various types of fees associated with a trademark. These have to do with:

  • registration of a trademark (according to the provisions of the law, it should distinguish itself from other existing ones. The following can constitute a trademark: drawing, ornament, word, spatial form, including shape of packaging, and also melody),
  • official fee for the protection of the trade mark for a certain period of time,
  • attorney’s fees.

How to account for the costs of trade mark registration?

Costs related to trade mark registration and patent attorney’s fees are one-off fees incurred at the beginning of the registration process. The fees are used to obtain the right of protection for a trademark, and therefore should be booked once, adding them to the costs on the date they are incurred. The registration fee is booked on the day it is paid, and the receipt should be kept as internal evidence. These expenses are deductible if they represent rational and economic reasons related to the business activity. On the other hand, the right of protection is granted for a period of 10 years, with the possibility of renewal. Since the fee for the protection of a trademark is related to a period exceeding one tax year, it cannot be charged directly to costs. According to the PIT Law, the protection right cannot be considered a fixed asset. On the other hand, it can constitute an intangible asset as an intellectual property right.

trademark registration costs

Cost of registration of a purchased trademark

The right of protection for a trademark is amortizable if it meets the following conditions:

  • the mark has been acquired,
  • the mark will be used for a minimum of 1 year,
  • it can be used on the date of acceptance for use,
  • it has been accepted or made available for use under a relevant agreement (e.g. license agreement, lease agreement).

The right of protection for the acquired trademark constitutes an intangible asset of the company. Its value must be entered in the fixed and intangible asset register to be able to make depreciation write-offs according to general rules.

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