Valuation of Intangibles for Transfer Pricing Purposes
The OECD is in the process of revising and adjusting its transfer pricing guidance. For this purpose it met with business representatives to discuss the valuation of intangibles in this context on 21-23 March 2011. The meeting agenda, presentation material submitted by private sector participants and list of participants can be downloaded from the OECD website.
Intangibles are one of the most challenging topics in the transfer pricing area for multinational enterprises and tax administrations because of the number and size of the disputes that arise in relation to their recognition and valuation.
Mr. Chris Lenon, the Chair of the BIAC[ ((Business and Industry Advisory Committee to the OECD))] Tax Committee pointed out during the meeting that the business community wanted the Transfer Pricing Guidelines of the OECD (“TPG”):
- minimize conflicts among tax administrations as well as between tax administrations and taxpayers
- be sufficiently clear for all tax authorities to be able to apply it consistently
- minimize double taxation, rather than be a set of prescriptive rules
Ms. Michelle Levac, Chair of the WP6 TPI[ ((Working Party No. 6 on the Taxation of Multinational Enterprises))], acknowledged that the guidance should not be too prescriptive as valuation involves professional judgment and depends on the circumstances of each case, as well as the concerns relating to the compliance burden.
Source: OECD Centre for Tax Policy and Administration website: OECD meets with business commentators on the valuation of intangibles for transfer pricing purposes
Image: chrisroll / FreeDigitalPhotos.net
Additional Information
- OECD Centre for Tax Policy and Adminsitration website: Transfer Pricing Aspects of Intangibles
- Ernst and Young website: 2010 Global Transfer Pricing survey
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Hartmut Buettner @ April 3, 2011
Latest Modification: April 3, 2011
