The OECD has published a revised discussion draft on the transfer pricing of intangibles. The updated draft places much greater importance on the functions generating intangible value and much less on legal ownership than the existing Transfer Pricing Guidelines. Although still a draft, it is not expected to change materially, and when finalised will probably be treated as having retrospective effect. Where a group member other than the legal owner performs some or all of the important functions relating to the value of the intangible assets, there may be a tax adjustment to reward that company with a share of the intangible return. Existing and prospective structures will need to be reconsidered.
