The Israel Tax Authority prevailed in Israel vs CA Software Israel Ltd (October 2022, Tel Aviv District Court, Case No 61226-06-17), which involved the valuation of transferred software. While the taxpayer’s experts tried to justify the lower valuation arguing that the economic useful life of the transferred intangibles was very short.

Topics: Discounted Cash Flow Tax Controversy Valuation of Intangibles Intangibles

There are several approaches to accounting for ongoing marketing expenses necessary to maintain a brand in a discounted cash flow valuation.

Topics: France Valuation of Intangibles Intangibles

Licensees bear significant commercial risk when they use valuable intangible assets owned by another entity. As such, any method that affords them with an expected return to its tangible assets that is only as high as the overall enterprise’s cost of capital is inconsistent with sound economics.

Topics: US Transfer Pricing TNMM/CPM Tax Controversy Royalty Rates Medtronic Section 482 Intangibles

This discussion presents a simplified illustration of the issues with respect to the unspecified method applied in Medtronic III in contrast to the IRS' extreme CPM approach and a traditional RPSM approach based on sound financial economics.

Topics: US Transfer Pricing Residual Profit Split Method TNMM/CPM Unspecified Method US Internal Revenue Service Tax Controversy Tax Policy Medtronic Section 482 Intangibles

A discussion of the possible issues in the recently settled transfer pricing dispute between Western Digital Corp. and the United States IRS.

Topics: United States Transfer Pricing Asia-Pacific Intangibles

Use of the CPM/TNMM to determine royalty rates for valuable intangibles in transfer pricing is incompatible with basic financial economics.

Topics: DEMPE OECD Guidelines TNMM/CPM US Internal Revenue Service Tax Policy Royalty Rates Intangibles

The Israel Tax Authority is questioning whether costs plus markup models Israeli R&D affiliates are at arm's length. This could present issues for multinationals that have not been giving proper consideration to cost base, asset intensity and ownership of valuable intangibles in their benchmarking.

Topics: DEMPE Base Erosion and Profit Shifting (BEPS) Benchmarking Tax Policy Intangibles