Key features explains in detail the meaning of various types of intangibles. The definition of intangibles for transfer pricing purposes is a vexing question and has been the subject of much discussion as the beps action plan has evolved. Transfer pricing aspects of intangibles on 16 september 2014, ahead of the g20 finance ministers meeting on 2021 september, the oecd published seven papers as a first tranche of deliverables under the base erosion and profit shifting beps project. The 15 action points of beps explained transfer pricing asia. The oecd action plan on beps, introduced in 20, set 15 specific action points to ensure international tax rules are fit for an increasingly. Discussion draft on hardtovalue intangibles comments by pim fris, emmanuel llinares and guillaume madelpuech, nera economic consulting 1 dear mr. Understanding intangibles summary of oecd beps action 8 4 the following summary of the current status of the draft oecd transfer pricing guidelines chapter vi was prepared by dr thomas bittner, dr roman dawid, madlen haupt, dr simon renaud, daniel schwerdt and dirk wilcke, all members of pwc germanys ip transfer pricing ip tp focus group. The hardtovalue intangibles recommendations included in the final report on beps actions. The final report on actions 8 to 10 settles on the following definition, which is incorporated into chapter vi of the organisation for economic cooperation and developments revised.
While the 2015 guidance is largely consistent with the 2014 action 8 report, the novel part of the 2015 guidance is the framework for analyzing intangibles transactions and allocating the associated risks in accordance with the control of the risks, along with the specific guidance on the return that can be expected for providing funding for the development of intangibles. The ruling touches upon two important issues valuation of intangible and application of profit split method psm for intangibles post the transfer and raises some. Ip tax planning in the light of beps university of tilburg. Understanding intangibles summary of oecd beps action 8 pwc.
Action 8 of the oecds beps action plan mandated the development of transfer pricing rules for transfers of htvi. Comments on the public discussion draft on arms length. Dq international ruling on hard to value intangibles. Tax treaties, transfer pricing and financial transactions division. A key focus of beps action 8 is to require greater substance behind the crossborder charges of royalties and for other intangibles. In summary, the draft beps action 8 implementation guidance on hardtovalue intangibles follows the path of the final report on actions 810 in aggravating the responsibilities of the. Oecd issues final guidance on transfer pricing for. Transfer pricing treatment of transactions with hardto. When it comes to the armslength principle, beps actions 8 to 10 are very much what it is all about and, as such, it is highly relevant how the actions are implemented in local law.
Hardtovalue intangibles page 2 at all levels of government. Hickman, in the context of the beps action plan, oecd has released on june 4, 2015, a discussion draft of. The guidance contained in this report aims at reaching a common understanding and practice among tax administrations on how to apply adjustments resulting from the application of the htvi approach. This supplements the approach to pricing hardto value intangibles set out in the beps report on aligning transfer pricing outcomes with value creation beps actions 810 published on 5 october 2015, and incorporated in chapter vi of the 2017 oecd transfer pricing guidelines for multinational enterprises and tax administrations the. Recent trends in transfer pricing intangibles, gaar and. The new guidance was developed under action 8 of the oecdg20. Beyond securing revenues by realigning taxation with economic activities and value.
The beps work on intangibles is closely related to other beps actions contained in the action plan. Definitely a good read for understanding intangibles from tp perspective and business viewpoint. This applies ot direct taxes like corporate taxation, but also indirect taxes like value added taxes and custom duties. The oecd, with the backing of the g20, published a 15 point action plan in july 20 setting out proposals to address base erosion and profit shifting beps. This supplements the approach to pricing hardtovalue intangibles set out in the beps report on aligning transfer pricing outcomes with value creation beps actions 810, published on 5 october 2015. Hardtovalue intangibles the discussion draft dated june 4, 2015. Implementation guidance on hardtovalue intangibles. The bmg has now published its comments on the discussion draft under action 8, which proposes revised text for the oecd transfer pricing guidelines on hard to value intangibles. With respect to action 8 intangibles2 of the oecd action plan on base. Use features like bookmarks, note taking and highlighting while reading intellectual property for. Are legal rights irrelevant for transfer pricing after. Comments on the public discussion draft on beps action 8 implementation guidance on hardtovalue intangibles. Introduction to the postbeps transferpricing aspects of. Intangibles when valuation is highly uncertain at the time of the transaction and special considerations for hardtovalue intangibles thank you for the opportunity to provide comments on the public discussion draft on beps action 8.
Recently, hyderabad tribunal in the case of dq international limited passed a judgment in relation to transfer of an intangible still under development by the taxpayer to its associated enterprise ae. Action 8 of the beps action plan identifies that work needs to be undertaken to develop transfer pricing rules or special measures for transfer of hardtovalue intangibles. Beyond securing revenues by realigning taxation with economic activities and value creation, the oecdg20 beps project aims to create a single set of consensusbased. Download it once and read it on your kindle device, pc, phones or tablets. Our nearly 7,000 individual members represent over 3,000 of the largest companies in the world.
In this book, the author considers recent trends in transfer pricing. Critical issues involve the determination of the arms length conditions for the use or transfer of intangibles intangibles as typical hard to value assets and. Implementation guidance on hardtovalue intangibles by technical team on 30 jun 2017 the ciot comments to sent to the oecd on beps. The goal of action 1 is to identify the challenges the digital economy poses to international taxation. Oecd ilibrary guidance on transfer pricing aspects of. The ciot comments sent to the oecd 18 june 2015 on beps action 8. The hardtovalue intangibles htvi recommendations included in the final report on beps actions 810 are intended to address perceived information. On 4 june, the organisation for economic cooperation and development oecd published a discussion draft on hardtovalueintangibles in terms of which the oecd proposes revising its transfer pricing guidelines.
Action 8 of the beps action plan identifies that work needs to be undertaken. In this book, the transfer pricing professionals of deloitte have sought to. In 20, oecd and g20 countries, working together on an equal footing, adopted a 15point action plan to address beps. Hardtovalue intangibles published by the oecd on june 4, 2015. Comment on oecd discussion draft of the beps action 8. In sweden, the assumed source of law practice is as follows. Keidanren hereby submits its comments on the public discussion draft beps action 8.
The contents of the books is given below sn description page no. Beps project, which requested the development of rules to. Policy proposals business law comments on the public discussion draft on beps action 8 implementation guidance on hardtovalue intangibles. Hardtovalue intangibles sans mystere in transfer pricing. The 2014 beps report, guidance on transfer pricing aspects of intangiblesretained in section d. The tone of the book was engrossing except for gaar and few beps action points which seemed as if these were touched too delicately. Comments on the public discussion draft on beps action 8. In june 2018, under the mandate of beps action 8, the oecd released additional guidance for tax administrations on the application of the approach to hardtovalue intangibles htvi. Beps action 8 implementation guidance on hardtovalue. Hardtovalueintangibles htvi based on the enterprise investment history.
Building a global business with patents, trademarks and intangible assets in compliance with oecd beps understanding ip series book 1 kindle edition by hegarty, raymond j download it once and read it on your kindle device, pc, phones or tablets. The work under actions 810 of the beps action plan will ensure that transfer pricing. Annex to chapter vi examples to illustrate the guidance on intangibles. The author concludes that this approach may deviate from the arms length principle. Action 8 therefore had the objective of developing rules to prevent beps from arising from the movement of intangibles among group members. Beps action 8 implementation guidance on hardtovalue intangibles. The oecds final report on actions 810 of the beps project, aligning. The action plan on base erosion and profit shifting, published in july 20, identifies 15 actions to address beps in a comprehensive manner, and sets deadlines to implement these actions. Guidance on transfer pricing aspects of intangibles.
Oecd ilibrary aligning transfer pricing outcomes with. Understanding intangibles summary of oecd beps action 8 this publication provides you with a summary and helpful interpretation of oecd beps action 8 including the final draft of chapter vi of the oecd transfer pricing guidelines published by the oecd in september 2014. As from the first beps proposals with respect to intangibles, it has been considered that the arms length standard als is slowly but surely being relegated to the back seat of the oecd guidelines. On may 23, 2017, the oecd released a draft of action 8 of the base erosion and profit shifting beps plan. The stated objective of beps actions 810 is to develop transfer pricing rules which create transfer pricing outcomes in line with value creation, and in particular rules to prevent beps by transferring risks or moving intangibles among, or allocating excessive capital to, group members, and by engaging in transactions which would not, or would only very. It is expected to be exploited in a novel manner, making reliable projections from past. In may the oecd published draft implementation guidance for consultation which is intended to assist with the implementation of the principles arising from the work done through action 8 of the beps action plan in relation to developing special measures for transfers of hardtovalue intangibles htvi. Projected income model must be abandoned by the oecd because its speculative. Understanding intangibles summary of oecd beps action 8. Beps action 8 recommendations allow tax administrations to rely on information obtained ex post when assessing transfer prices set for transactions involving hardtovalue intangibles.
Beps actions 8, 9 and 10 involved rules to prevent base erosion and profit shifting by a moving intangibles among group members action 8, b transferring risks among, or allocating excessive capital to, group members action 9 and c by engaging in transactions which would not, or would only very rarely, occur between third parties. Addressing base erosion and profit shifting is a key priority of governments around the globe. On the other hand, group synergies and market specific characteristics are not recognized as intangibles as they cannot be controlled by any party of the group. Release of action plan with 15 separate actionswork streams. Use features like bookmarks, note taking and highlighting while reading recent trends in transfer pricing intangibles, gaar and beps. In particular, it is proposed that tax authorities will be allowed to use ex post evidence, i. The guidance on transfer pricing aspects of intangibles the guidance sets a list of new comparability features to be taken into account when carrying out a comparability analysis in transactions involving intangibles. An example of such a challenge is a company that has significant digital. Discusses the various possible methodologies for valuing the intangibles including the typical and residual methods accounts for all the relevant changes suggested by the oecd in the beps action point 810 report regarding intangibles valuation of highly uncertain as well hardtovalue intangibles relevant features of and taxation. Recent trends in transfer pricing intangibles, gaar and beps. Comment on oecd discussion draft of the beps action 8 hardtovalue intangibles guidance. Action 8 of the beps action plan covers the transfer pricing of intangibles and requires the development. The new version of chapter vi contains guidance focused on ensuring that the profits associated with the transfer and use of intangibles are appropriately.