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Friday, June 3, 2011
The OECD is about to tackle a law professor's dream assignment--updating how the organization's 1995 transfer pricing tax guidelines treat intangibles. With the evolving modern multinational corporation has come an array of new legal concepts--including so-called soft intangibles--that pose challenges for policy makers seeking to adapt the arm's-length standard to cope with such notions as "workforce in place, "a commitment to undertake research," and the "right to share in the future return of an intangible owned by another associated enterprise." Caroline Silberztein, head of the OECD's transfer pricing unit, in an interview with BNA June 28, said the new project, if approved, would likely result in a full rewrite of the organization's intangibles guidance. Silberztein said many commentators tend to confuse intangibles with "value drivers," and Working Party No. 6 is currently considering whether to examine the economic characteristics of typical transactions "without being constrained by whether they qualify as intangibles, services, or otherwise." The official also said that in her view "the assessment of comparability would move away from a comparison of prices or returns towards a comparison of pricing models." The new project promises a rigorous policy debate given that there is no universal consensus on when an intangible exists. --Kevin A. Bell, BNA Tax Management Transfer Pricing Report senior editor To read the Interview with Silberztein, register for free access to BNA Tax Management Transfer Pricing Report at: http://www.bnatax.com/Transfer-Pricing-Report-p7899/
The OECD is about to tackle a law professor's dream assignment--updating how the organization's 1995 transfer pricing tax guidelines treat intangibles.
With the evolving modern multinational corporation has come an array of new legal concepts--including so-called soft intangibles--that pose challenges for policy makers seeking to adapt the arm's-length standard to cope with such notions as "workforce in place, "a commitment to undertake research," and the "right to share in the future return of an intangible owned by another associated enterprise."
Caroline Silberztein, head of the OECD's transfer pricing unit, in an interview with BNA June 28, said the new project, if approved, would likely result in a full rewrite of the organization's intangibles guidance.
Silberztein said many commentators tend to confuse intangibles with "value drivers," and Working Party No. 6 is currently considering whether to examine the economic characteristics of typical transactions "without being constrained by whether they qualify as intangibles, services, or otherwise."
The official also said that in her view "the assessment of comparability would move away from a comparison of prices or returns towards a comparison of pricing models."
The new project promises a rigorous policy debate given that there is no universal consensus on when an intangible exists.
--Kevin A. Bell, BNA Tax Management Transfer Pricing Report senior editor
To read the Interview with Silberztein, register for free access to BNA Tax Management Transfer Pricing Report at:
http://www.bnatax.com/Transfer-Pricing-Report-p7899/
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