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: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: form 3cd :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: TDS :: empanelment :: cpt :: VAT RATES
Transfer Pricing »
 US, Mexico agree to transfer pricing framework for maquiladoras
 Indian tax official sees expanded role for BEPS inclusive framework, addresses transfer pricing local file
  Transfer Pricing analysis of professional services provided by related-party individuals and corporations
 Transfer Pricing analysis of professional services provided by related-party individuals and corporations
 FinMin to issue rules for norms under BEPS
  CBDT signs five unilateral advance pricing agreements
 UN tax committee to consider major updates to transfer pricing manual, model tax treaty
 CRA intensifies scrutiny of complex transfer pricing tax avoidance scheme
 New transfer pricing requirements in Poland
 Additional Tax Assessment Following Transfer Pricing Control Audit
 Aligning customs with transfer pricing operations

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.

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 2016 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