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Tax Treatment of IP Holding Companies

Tax Treatment of IP Holding Companies
Product Code - TMA33
Speaker(s): Anne Fairpo, CTA (Fellow), Barrister,13 Old Square Chambers & Atlas Chambers (UK) Moderator & Speaker; Peter Maher, Partner and Head of the Firm's Tax Department, A&L Goodbody (Ireland); Michael Ellul, Partner, QUBE Services Limited (Malta); Rocco Femia, Member, Miller & Chevalier (USA)
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Tax professionals located in the United States, UK, Ireland, and Malta discussed the tax treatment of IP holding companies.

This BNA webcast was considered from the perspective of these different jurisdictions the following issues:

• Taxation of royalty income for patents and other intellectual property - the panel outlined the approaches to taxing intellectual property in each of their jurisdictions, compared the taxation of overseas IP with local IP, and the differing tax treatment of residents and non-residents.

• Incentives for investment in intellectual property - there are a range of incentives that governments use to encourage investment in intellectual property, from tax-based incentives such as patent boxes and R&D reliefs, through to non-tax incentives such as direct grants. The panel considered the incentives available in the different jurisdictions, and their effectiveness.

• Anti-deferral mechanisms - subpart F, controlled foreign companies and others - the portability of intellectual property means that tax authorities are often concerned that profits can be artificially diverted outside the jurisdiction to reduce a group's tax burden; nevertheless, the UK introduced an exemption for IP holding companies with a limited UK connection, and reviewed the anti-deferral mechanisms currently in place. Other jurisdictions took differing approaches to the problem, and the panel reviewed the local approaches that apply.

• Transfer pricing of intellectual property - IP has risen steadily on the transfer pricing agenda over the years, with some substantial settlements with tax authorities, and was the subject of an OECD project launched in 2010. The panel discussed approaches to transfer pricing of intellectual property and particular problems encountered in practice.

Anne Fairpo, CTA (Fellow), Barrister,13 Old Square Chambers & Atlas Chambers (UK) Moderator & Speaker; Peter Maher, Partner and Head of the Firm's Tax Department, A&L Goodbody (Ireland); Michael Ellul, Partner, QUBE Services Limited (Malta); Rocco Femia, Member, Miller & Chevalier (USA)

Anne Fairpo, CTA(Fellow), Barrister, 13 Old Square Chambers & Atlas Chambers


Anne’s practicecovers UK and international corporate tax planning and disputes, acting for arange of clients from small owner-managed businesses to listedmultinationals.  She also has aparticular interest in taxation of intellectual property and also cross-bordertax planning, with regard to both direct and indirect tax matters. Anne is theauthor of "Taxation of Intellectual Property" and contributes to anumber of other publications.  She is onthe Council of the Chartered Institute of Taxation and chairs the EducationCommittee of the Institute.

Michael Ellul, Partner – QUBE Services Limited/David Griscti & Associates

Michael’s first professional experience was in syndicated lending with the Maltese subsidiary of Istituto Bancario San Paolo di Torino SpA in Malta. Following this, Michael moved to Coopers & Lybrand (PricewaterhouseCoopers) in 1994 and was involved in the tax and corporate services arm of the firm up to 31st March 2000. Michael resigned from PricewaterhouseCoopers to join a boutique tax and corporate services firm as Tax Partner on 1st April 2000 and was instrumental in building up the business of this firm in the period to August 2006. In 2006, Michael joined forces with David Griscti and Thomas Jacobsen to establish QUBE Services Limited. The joint organisation QUBE Services Limited/David Griscti & Associates is a market leader in the Investment Services (securities) market and in the area of tax planning and compliance and corporate services in Malta. QUBE Services Limited/David Griscti & Associates is based in thecapital city, Valletta, and services an international client base on amulti-jurisdictional basis.

Peter Maher, Partner, A&L Goodbody and is Head of the Firm's Tax Department

Peter represents clients in every aspect of tax work, with particular emphasis on inbound investment, cross border financings and structuring, capital market transactions and US multinational tax planning and business restructurings. Peter is regularly listed as a leading adviser in Euromoney’s Guide to the World’s Leading Tax Lawyers, The Legal 500, Who’s Who of International Tax Lawyers, Chambers Global and PLC Which Lawyer? 2011 and Who's Who Legal 2010 and 2011. He is a “first-class and highly commercial lawyer. He never tries to score points – he just knows what needs to be done and he does it" (Chambers Global 2010). "He is very able and responsive" (Legal 500 2011). He is a former Co-chair of the Taxes Committee of the International Bar Association and of the Irish Chapter of the International Fiscal Association. He lectures regularly including at various IBA, IFA and ABA tax conferences and has written extensively including contributing chapters for The Inward Investment and International Taxation Review by Law Business Research, The International Comparative Legal Guide to Corporate Tax by Global Legal Group, International Tax Law (Winning Legal Strategies) by Aspatore Books, Tax Treatment of Islamic Finance Products, a Comparative Survey by IBFD, writing articles for Tax Management Financial Products Report, World Securities Law Report and Finance, and Treasury Weekly Report. He is also one of the contributing editors of Tax on Inbound Investment (Getting the Deal Through) by Law Business Research and one of the two Irish contributors to Tax Management International Forum.


Rocco Femia, Member, Miller & Chevalier

Rocco’s practice focuses on international tax planning for domestic and foreign-based enterprises, and on assisting such enterprises in avoiding or resolving controversies with the Internal Revenue Service (IRS) and foreign tax authorities involving U.S. international tax rules, transfer pricing, and U.S. tax treaties. Rocco has represented taxpayers before the IRS, the U.S. Department of the Treasury, the Joint Committee on Taxation, and the staffs of the House Ways and Means Committee and the Senate Finance Committee. Rocco has also advised governments on U.S. international tax developments. Rocco is a former Associate International Tax Counsel at the U.S. Department of the Treasury, Office of Tax Policy. While at the Treasury, Rocco had responsibility for a broad spectrum of U.S. tax treaty and international tax regulatory and legislative matters. Rocco was the principal staff attorney involved in the negotiation of the 2003 U.S.-Japan tax treaty and had responsibility for regulatory and other guidance in the areas of intercompany transfer pricing, Subpart F, and entity classification (check-the-box). He advised senior officials on pending legislation regarding U.S. international taxation, including the 2003 Jobs and Growth Revenue Reconciliation Act and the 2004 American Jobs Creation Act. Rocco also represented the interests of the United States in international organizations, including the Organisation for Economic Co-operation and Development (OECD) Committee on Fiscal Affairs.