On July 30, the OECD released its long-awaited revised discussion draft on transfer pricing aspects of intangibles, and invited interested parties for a public consultation until October 1, 2013. In the course of this public consultation, Copenhagen Economics provided comments, arguing that the final version should be modified in the following areas:

• Legal Ownership: The notion of economic ownership reflecting anticipated economic benefits to indicate the basis for any intangible related remuneration should be adopted. The draft misleadingly stresses the importance of legal ownership.
• Payment for the use of the company name: Any compensation for expanding the use of the acquirer’s company name is fundamentally wrong with any economics and business thinking.
• Tax audit: Tax administration’s need to carefully evaluate taxpayer’s assessment of the intangible value. Tax administration’s should not be allowed to reassess any intangible value based inferior methods and information.

Clearer guidance should also be given to the notions of ‘control’ and ‘realistically available options’.  

Download Copenhagen Economics’ comments

For further information please contact Senior Economist Hendrik Fügemann