Transfer Pricing Report: Intangible Property, Tangible Profits 2015

2015 witnessed the continuing evolution of the dynamic landscape of transfer pricing for intangibles. Disputes about the appropriate arm’s length consideration for the transfer of an intangible asset have become increasingly common. Concern over the potential for double taxation has increased, as regulatory bodies have proposed and begun implementing new rules. These concerns reflect the possible uneven application of proposed changes to transfer pricing guidance, some of which will have substantial effects on tax planning. Most notably, several significant issuances were released by the Organisation for Economic Co-operation and Development (OECD), including the OECD’s final Base Erosion and Profit Shifting (BEPS) package.

In this year’s annual transfer pricing report, Edgeworth Economics provides an overview of the year’s critical regulatory developments and captures—via its proprietary survey of leading transfer pricing professionals—the practical state of transfer pricing for intangibles, including practitioners’ responses to regulatory developments and insights into their approaches. In the current environment, transfer pricing practitioners must navigate murky regulatory waters while rationalizing tax effects with business operations to successfully plan and execute tax strategies around transfers of intangibles. This survey will inform practitioners about the key issues and how their peers are seeking to address them.

The annual white paper, Transfer Pricing: Intangible Property, Tangible Profits, was first published by Edgeworth Economics, in conjunction with ALM Legal Intelligence, in 2014. Following its success, Edgeworth once again surveyed leading transfer pricing professionals to provide unique insight into 2015’s regulatory trends. Edgeworth created and fielded two surveys—one was sent to attorneys at law firms, and the other to transfer pricing professionals at companies. Edgeworth administered the online survey, and collected and analyzed the data. 

Among the key findings in Transfer Pricing Report: Intangible Property, Tangible Profits 2015:

• Most companies and law firms align transactional tax arrangements for intangibles around business operations.
• While many continue to take a wait-and-see approach to BEPS, some have begun reassessing their arrangements.
• Many respondents already have arrangements in place that are consistent with the BEPS guidance.