Transfer Pricing: Værdiansættelse af immaterielle aktiver

Kirstine Juhl Mikkelsen

Student thesis: Diploma thesis

Abstract

This paper examines what intangible property is, how to identify the ownership, which factors there have impact on the valuation process and which methods there are used to determine the arm’s length price on the intangible property. The examination is based on the Danish legislation, Danish guidance from the tax authorities and the OECD guidelines. In order to find a definition, figure out how the ownership is identified and which valuation methods there are used. In that examination there is identified a number of issues regarding lack of guidance concerning intangible property. This is partly due to intangible property in it’s nature is unique and valuable. To document that multinational entities acts at arm's length, it is crucial that independent parties would have entered into the same agreements. The easiest way to document that the contract is on arm’s length is to find a comparable transaction that have taken place between independent parties. In order to find a comparable transaction, there has to be a trade with a similar intangible property. This is often impossible to find, as previously stated because intangible property by nature is defined as unique and that there is great uncertainty about the future value. In such cases, it will be necessary for the multinational entities to have a detailed guide to make an arm’s length valuation of the intangible properties when it is not possible to find comparable transactions. The Danish and OECD's guidelines are very limited in this area. This leads to increased risk of multinational entities undergoing increases in taxable income and double taxation, since they cannot value the intangible property so that the arm's length principle is satisfied. It is a necessity that there will be an increased focus on international guidance on the valuation of intangible property. OECD is also preparing a new chapter on special conditions concerning intangible property. However the new chapter do not address the problem concerning the valuation methods, so this is still an area subject to great uncertainty.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2014
Number of pages61