The OECD’s revised discussion draft on intangibles (RDD) seeks to provide guidance on action point 8 of the BEPS action plan concerning the transfer pricing of intangibles.
The RDD highlights that return on intangibles should be attributed to the entity which performs important functions provides all assets and assumes key risks and costs related to the development enhancement maintenance and protection of intangibles. The RDD explicitly mentions that mere legal ownership of an intangible shall not entitle the legal owner of any return establishing precedence of ‘economic ownership’ over ‘legal ownership’.
The RDD further mentions that key functions in relation to an intangible may include design and control of research and marketing programmes management and control of budgets control over strategic decisions regarding intangible development programmes important decisions regarding defence and protection of intangibles and ongoing quality control. Further it mentions that...
