Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: cpt :: VAT RATES :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: form 3cd :: VAT Audit :: ACCOUNTING STANDARDS :: TDS :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4%
 
 
« Transfer Pricing »
 World Tax and World Transfer Pricing submissions open
 African Tax Officials Receive Transfer Pricing Training
 India-Russia spar over pricing and transfer of tech in Kamov copters
 Highlights Of Recent Amendments In The CommuniquĂ© Concerning The Mergers And Acquisitions
 New transfer pricing decree: a step closer to international standards
 Indiana Combined Reporting and Transfer Pricing Studies
 Secondary Adjustments to Indian Transfer Pricing Regulations
 Stock transfers in GST and how this impacts SMEs
 Government hopes to resolve 100 transfer pricing issues by year end
 Multinationals to heed tax man’s further-reaching hand as transfer pricing disputes come to a head
 Government may be looking to fix a domestic transfer pricing loophole

New transfer pricing rules have implications for intellectual property valuation
July, 14th 2016

The Organization for Economic Co-operation and Development (OECD) and the G20 recently adopted a formal plan related to transfer pricing that has implications for valuations of intangible and intellectual property (IP).

The Action Plan on Base Erosion and Profit Shifting (BEPS) is meant to address multinational enterprises that engage in harmful tax practices, including treaty shopping, related-party financial transactions, and intangible property transactions.

Transfer pricing rules require corporations and their commonly controlled entities to value all transactions at fair market value. When transferring an intangible asset among entities, compensation for the intangible asset must be commensurate with the income earned by the asset.

Background
To ensure OECD member countries are not subject to “unfair base erosion practices and profit shifting,” the BEPS Action Plan was developed in 2013. The OECD’s main objective is to “assure that transfer pricing outcomes are in line with value creation.”

The OECD is moving in a direction similar to the U.S., tightening controls and making sure OECD member countries do not assign a low value to IP to transfer into a more favorable tax jurisdiction. In recent years, the OECD has expressed concern over practices that artificially segregate taxable income from the activities that generate it, stating profits should be going to the place where it is being generated.

Potential benefits and costs
A benefit of the new policy is that risk assessment guidance may discourage tax authorities from initiating costly disputes over minor issues. A master file could encourage the adoption of a set of globally-consistent and uniform transfer pricing policies that may streamline the compliance process. For more information on recommended transfer pricing document requirements, click here.

Potential costs of the policy include tax authorities possibly using the country-by-country report to inappropriately make “formula-based” adjustments, and therefore increase the likelihood of disputes and double taxation.

Intellectual property valuation matters
The new regulations formalize the use of the income approach for determining the value of the IP. While it is not a new method of valuation, this formalization may imply the need for significantly greater documentation and support for the valuation. To avoid scrutiny, it is important to obtain a supportable valuation of IP. If you do not have a defensible IP structure in place, tax authorities will assert their view.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Development Software Programming Software Engineering Custom Software Development Requirement Based Software Development Software Solutions Software Serv

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions