Determination of Intangible Property Ownership in Transfer Pricing Analyses
The incognito driver of economic value creation and growth in market share for any corporation in the modern era are their 'intangible assets'. There seems to be a paradigm shift in today's interconnected world from physical to knowledge content as a source of value. MNEs (Multinational Enterprises) are increasingly riding on this new wave with their investments on intangibles growing at a faster rate than tangible assets. Given the unique characteristics of an intangible in terms of their ownership (legal and economic) and other economic factors, makes quantification of the same for 'transfer pricing' a highly controversial subject Because of the importance of intangible assets within an MNE group to sustain competitive advantage in the global marketplace, it is absolutely essential that a comprehensive analysis be undertaken to shield group members from significant reassessments that frequently run into the millions of dollars. This paper unveils all the definitional, legal and economic mysteries in the 'transfer pricing' and 'intangible asset' matrix that has been a controversial and elusive issue for MNEs.
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