2013, the year for intangibles in international taxation
Garrigues, a founding member of Taxand, the foremost network of independent tax firms currently operating in nearly fifty countries, has participated in the preparation of a survey of the heads of the tax and financial departments of multinational groups regarding their views on the issues surrounding intangible assets in a transfer pricing context, and in the analysis of the results and preparation of the report on the conclusions.
The new wording of Chapter VI of the OECD Transfer Pricing Guidelines and the growing concern at an international level regarding the tax policy operated by multinational groups point to 2013 foreseeably being a year in which tax authorities will pay special attention to the transfer pricing policies adopted by multinational groups in respect of their intangible assets.
Intangibles are an area that has also been singled out for special scrutiny in the working document recently prepared by the OECD on the erosion of tax bases and the shifting of profits (Addressing Base Erosion and Profit Shifting – BEPS), which will inevitably have an impact on future legislation on this matter. Consequently, multinational groups with valuable intangibles cannot, and should not, assume that their transfer pricing policies on such assets and any supporting documentation they may have will be duly compliant with the new principles.
In fact, 63% of respondents predict greater scrutiny by tax authorities of intangible assets such as patents, trademarks and copyright, and 76% envisage taking measures in readiness for any questioning of their transfer pricing policies on intangible assets in the event a tax inspection or audit.