IP Assets in Transfer Pricing
Trademarks, copyrights, patents, trade secrets and other intangible assets have been used by businesses to shelter income from state and international tax jurisdictions. Typically, one or more groups of intellectual property assets are owned by a subsidiary corporation in a lower tax jurisdiction and licensed to another subsidiary operating in a higher tax jurisdiction. Such transactions require establishment of a fair value and reasonable royalty for use of the subject IP assets.
The Value of IP Assets in Transfer Pricing
Based on our specialty in the valuation and analysis of IP, Nevium provides expertise in the identification and valuation of assets in the context of tax transactions. In these situations, Nevium works with tax authorities, corporations and their advisors to identify, group, and value IP and intangible assets and benchmark reasonable or fair royalty rates.
Abusive Tax Avoidance Transactions – ATAT
Multi-national entities have used transfer pricing on cross-border transactions to lessen taxable profits in their jurisdiction. Nevium’s experience in working with these transactions enables us to provide you with valuation support along with a fair market royalty assessment for a license back to the US entity. We provide expert consulting in the valuation of IP assets, as well as expert testimony to support our opinions in transfer pricing and abusive tax avoidance transactions or ATAT.
Nevium’s Transfer Pricing Experience
Recent valuation work by Nevium in the context of tax transactions:
- Advised a state tax authority in identification and valuation of key assets supporting a national retail chain’s operations. Nevium’s analysis helped support the tax authority’s claim that the local retail operating subsidiary was paying an unfair royalty for use of proprietary operating system assets domiciled in a lower tax jurisdiction.
- We have valued brand-related, technology and copyright assets for tax, estate, bankruptcy and financial reporting.
- Valuation of IP assets being transferred to an offshore entity, along with a fair market royalty rate assessment for a license back to the US entity.