Income generated through computer software cross-border transactions is generally considered as royalties, and software royalties are taxed in most countries according to Article 12 of OECD Model Tax Convention. However, there are still series of controversy about how to identify the nature of the income in international trade. There are different purposes on different computer software cross-border transactions, and sometimes the income come from software transaction is also identified as business income and applicable Article 7 of the OECD Model Tax Convention. Due to different tax base between royalties and business income, it will lead to abuse of tax treaties if the nature of this kind of income can not be identified. So the nature of the software copyright transactions income should be identified more explicitly and legitimately from the legislative purpose and interest in the field of international trade, thus it will achieve the best balance between the promotion of development of software industry and protection of the right of the tax.