Transfer Pricing Of Intangibles

Article by Andreas Köster-Böckenförde and Alexa Clauss

I. Introduction

The development, transfer, and licensing of intangibles are part and parcel of cross-border transactions among related parties. The allocation of costs and revenues, risks and chances, has a fundamental impact on the tax liability of multinational companies. Therefore, enterprises should pay special attention to transfer-pricing strategies, particularly with regard to intangible assets. But determining adequate transfer prices is extremely difficult. And the national fiscal authorities closely examine how companies deal with this matter, paying particular attention to whether they comply with the documentation rules.