Using Internal Agreements to Price Intangibles Transfers
The OECD’s latest draft on intangibles questions the availability and use of CUTs. In his article “Using Internal Agreements to Price Intangibles Transfers” in Tax Management’s Transfer Pricing Report, Dr. George Korenko addresses the issues of comparability and adjustments for potential CUTs and how they can be used to reliably apply the comparable uncontrolled price method.
In particular, Dr. Korenko says that multinational firms that are active participants in the marketplace for similar intangibles are likely to have potential CUTs in their licensing portfolios. He also shows how firms that are active in in-licensing and out-licensing these technologies often prepare financial analyses that are useful for determining profit potential and making reliable adjustments where necessary.
He concludes by explaining why companies that are active in the marketplace for intangible property should consider examining their license agreements with third parties as potential comparables for controlled transfers of intangible property.
Dr. Korenko, a partner in Edgeworth’s D.C. office, is an expert in transfer pricing and has written extensively about this topic. For more information about his publications and experience in transfer pricing, please contact Dr. Korenko.