Transfer Pricing and Intangibles

1. S. 4General remarks

In the last decades, intangibles have become one of the most relevant factors to consider when running a global business and, therefore, are of great interest to tax administrations. This applies in particular to the developed economies that are often technology exporting countries where intangibles are crucial for the full realization of all of the benefits coming from new products and services. Undoubtedly, however, intangibles are becoming increasingly relevant for those developing or less developed economies that are on a changing track from a technology recipient to a technology provider.

With the increasing importance of intangibles for economies, their tax treatment has also been under scrutiny, which includes inter alia the transfer pricing issues connected with intangibles. As with other types of transactions, MNEs are seeking the best ways to optimize their business arrangements related to intangibles in order to obtain the most tax-efficient treatment. On the other hand, tax authorities have become increasingly concerned with the ease that intangibles can be used in aggressive planning to obtain tax benefits and result in base erosion and profit shifting...