Transfer Pricing and Intangibles

S. 28This article will provide an introduction of the definition of intangibles. It will start with presenting the relevance of the definition of intangibles for transfer pricing purposes, further covering the definition of intangibles in the OECD guidance. Following that, it will discuss the effects of multiple definitions for tax purposes. After a description of the interaction with the contribution to the development of intangibles, this part of the section finishes with a summary.

1. Relevance of the definition of intangibles

OECD’s BEPS Action 8–10 report and the resulting changes in the Transfer Pricing Guidelines (2017 TPG) elaborate on the question of what constitutes an intangible asset for transfer pricing purposes. Both Section A of Chapter VI (‘Identifying intangibles’), Sections D6–D8 of Chapter I and, to a certain extent, Chapter IX deal with the question of what constitutes an intangible or – in the case of Chapter I – what does not constitute an intangible. Interestingly, Chapter VI of the TPG starts by stating that, for transfer pricing purposes, it is not that relevant what label is assigned to a particular transaction, i.e., whether it can be called an intangible or not...