Migrating Intangibles: More Complex Than Just the Movements of Functions, Assets, and Risks

Recently, there have been significant discussions regarding government crackdowns on tax havens related to multinational organizations moving profits offshore. From a tax perspective, any financial planning that involves moving profits offshore by multinational organizations is justifiable if the corresponding functions, assets, and risks borne to earn these profits are also shifted offshore. The incentive to minimize taxes by shifting these functions, assets, and risks to low tax jurisdictions is to be expected. After all, the world economy has become increasingly globalized and the need to minimize after-tax profits is not only advantageous to improving corporate profits, but is also necessary in order to stay competitive. While implementing such a framework is a long and complex process, if done correctly, it is beneficial for all involved.