Royalties (NFT)
Also known as: NFT royalties, creator royalties
Ongoing payments a creator receives on secondary NFT sales, generally taxed as revenue income when received.
Definition
NFT royalties are payments programmed into a token so that the original creator earns a percentage each time it is resold on a secondary market. For the creator these receipts are generally revenue income, taxed at their rand value when received. Royalties are distinct from a one-off disposal — they are recurring income tied to the creator's work, much like other royalty streams.
Example
Your NFT carries a 10% royalty. When a collector resells it for 2 ETH, you receive 0.2 ETH as royalty income, taxed at its rand value on receipt.
Jurisdiction notes
- South Africa: NFT royalties received by a creator are generally revenue income at rand value on receipt.