Transfer Pricing and Intangibles

We highlight below a few key attributes of intangibles from a Transfer Pricing (“TP”) perspective.

1.    Introduction

Intangibles:

• Assets not physical or financial in nature
• Owned or controlled for commercial activities purposes
• Compensation on usage or transfer with third parties

2.    Types of Intangibles

• Goodwill
• Brands
• Patents
• Trade names or trademarks
• Copyrights
• Licenses
• Customer lists
• Technical know-how
• Research and development
• Trade secrets

3.    Major TP Considerations

• Identification of intangibles
• Determination of arm’s length price

4.    Major Types of Transactions

• Transfers of intangibles or rights in intangibles
• Use of intangibles for sale of goods or services

5.    DEMPE Analysis

Identifying parties performing development, enhancement, maintenance, protection, and exploitation (“DEMPE”) functions Core analysis related to intangible Allocation of profits based on relative contribution.

6.    How Can Crowe Help?

• Identification of intangibles and transactions involving intangibles
• Determination of arm’s length pricing
• Drafting and maintenance of robust documentation