Aspekter af Intangibles og Transfer Pricing

David Bonde

Student thesis: Master thesis


During the past five years, 74% of the nominal income adjustments, amounting to EUR 6,5 billion, conducted by the Danish tax authorities has been related to cross-border transactions involving intangibles. The media sometimes exhibits these adjustments as the result of dodgy tax schemes designed by multinational corporations to avoid taxation of their business transactions. No doubt, the pace of globalisation and integration of national economies has increased substantially the last decade which creates opportunities for multinational corporations to minimize their tax burden. But the corporations are also at risk of double taxation as well as subsequent adjustments commenced by the tax authorities. This is particularly true when it comes to intangibles, since intangibles are a difficult concept to grasp let alone capture in a clearly, objectively defined conceptualisation, especially when attempting to establish an international consensus on a legal implementation of such. Consequently the G20 finance ministers have called for action regarding base erosion and profit shifting (BEPS), and in 2013, OECD thus published Action Plan on BEPS. It’s an ambitious plan to realign the international transfer pricing guidelines, including the clarification on intangibles, which is addressed specifically by action points 8 and 9. In 2013, OECD published Revised Discussion Draft on Intangibles, the second draft for a new chapter VI in OECD Transfer Pricing Guidelines with the intention of publishing the final version of the chapter in September 2014. When a multinational corporation with a fairly strict principal structure based in Denmark, acquires the shares of three different independent foreign companies and implements them in an existing principal structure, the acquired companies are transformed from fully-fledged to limited-risk companies. Implications regarding the transfer of intangibles relating to the restructuring are analysed based upon five selected intangibles in the intersection between Revised Discussion Draft, OECD Transfer Pricing Guidelines on restructuring and the Danish tax law on depreciation. The analysis shows that OECD Transfer Pricing guidelines are more flexible in accommodating tax issues relating to intangibles and transfer pricing than the Danish tax law which tends to be narrower in its legal classification of intangibles, thus leading to issues of double taxation. The most difficult task, however, seems to be to create a supranational alignment of practical transfer pricing guidelines that leads to fairness in taxation for the parties involved, especially in the areas of definition and tax classification of the intangibles in question.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2014
Number of pages83