Transfer Pricing – Intangibles Valuation And Tax Planning Face More Headwind

The OECD’s July 2013 revised discussion draft (“the Revised Draft”) on transfer pricing aspects of intangibles include some updates that may impact MNC’s tax planning of intangible assets (“IP”).

The Draft adopts a broad definition of intangibles and provides guidance on what is not considered intangible assets.

There was guidance on how the funding of intangible development should be remunerated based on arms’ length principles. Comparability factors to consider include the following:

•  Location savings

•  Other local market features

•  Assembled workforce

•  Multinational group synergies.

The Revised Draft adopts a more transactional approach and retains a focus on functions performed, assets used and risks assumed. Read More