Q: In 2008, parties entered into a royalty contract for the use of a computer software developed by another independent entity. Under the terms of the terms of the royalty contract, the intellectual property rights subsisting in the software were assigned to my client in consideration of ongoing royalty payments, which were calculated at 15% of income generated by the use of the software (approximately $110,000 per annum). The parties have now agreed to vary the contract to end the ongoing royalty payments and replace them with a one-off payment of $650,000 for the ongoing use of the software. During the contract period, no GST.
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