TY  - BOOK
AU  - Torvik,Oddleif
TI  - Transfer Pricing and Intangibles: US and OECD Arm's Length Distribution of Operating Profits from IP Value Chains
T2  - IBFD Doctoral Series
SN  - 9789087224974
AV  - K4542 .T678 2018
U1  - 341.48439999999999 
PY  - 2018///
CY  - Amsterdam
PB  - IBFD Publications USA, Incorporated
KW  - Transfer pricing-Taxation-Law and legislation
KW  - Electronic books
N1  - Cover -- IBFD Doctoral Series -- Title -- Copyright -- Preface -- Abbreviations -- Part 1 -- Chapter 1: Research Questions, Methodology and Sources of Law -- 1.1. Introductory comments -- 1.2. Key terminology and contextualization -- 1.3. Research questions and structure -- 1.4. Methodology -- 1.5. The relevant OECD sources of law -- 1.5.1. Introduction -- 1.5.2. Article 9 of the OECD MTC -- 1.5.3. The OECD Commentaries on Article 9 and the OECD Transfer Pricing Guidelines -- 1.5.4. Article 7 of the OECD MTC -- 1.5.5. The OECD Commentaries on Article 7 and the 2010 OECD Report -- 1.5.6. Case law in connection with articles 9 and 7 -- 1.6. The relevant US sources of law -- 1.6.1. Introduction -- 1.6.2. IRC section 482 -- 1.6.3. The IRC section 482 US Treasury Regulations -- 1.6.4. Case law -- 1.6.5. The OECD TPG -- 1.7. A few words on the 2017 US tax reform -- 1.8. The relationship between the book and other transfer pricing literature -- 1.9. Reference register and source abbreviations -- Chapter 2: Business and Tax Motivations for Intangible Value Chain Structures -- 2.1. Introduction -- 2.2. Horizontal and vertical FDI -- 2.3. To stay home (outsource) or to go out (FDI)? -- 2.4. The centralized principal model for profit allocation -- 2.5. IP regimes and the 2015 OECD nexus approach -- Chapter 3: Controlled Intangibles Transfers -- 3.1. Introduction -- 3.2. The US intangibles definition -- 3.2.1. Introduction -- 3.2.2. The pre-2018 version of the US IP definition -- 3.2.2.1. Introductory comments -- 3.2.2.2. The relationship between the 936 definition and profit allocation -- 3.2.2.3. Are goodwill, going concern value and workforce in place encompassed by the pre-2018 version of the 936 definition?; 3.2.2.4. Is goodwill distinguishable from synergy value attributable to a group of identifiable 936-definition intangibles valued in the aggregate? -- 3.2.2.5. Concluding comments on the pre-2018 version of the US IP definition -- 3.2.3. The 2018 version of the US IP definition (the 2017 tax reform amendment) -- 3.3. The OECD intangibles concept -- 3.4. Useful distinctions on the intangibles concept -- 3.4.1. Introduction -- 3.4.2. Manufacturing and marketing intangibles -- 3.4.3. Unique and non-unique value chain contributions -- 3.5. Controlled intangibles transfers subject to transfer pricing under US law -- 3.5.1. The taxation of US inbound and outbound intangibles transfers -- 3.5.2. The context in which IRC section 367 applies:  Non-recognition transactions -- 3.5.3. The historical background of IRC section 367 -- 3.5.4. Current gain recognition under IRC section 367(a) -- 3.5.5. Deemed royalty inclusions under IRC section 367(d) -- 3.5.5.1. Historical background -- 3.5.5.2. The material content of IRC section 367(d): Sale of contingent payments -- 3.5.6. Income recognition under section 367(a) or (d) for intangible transfers? -- 3.5.7. The further relationship between profit allocation under sections 482 and 367 -- 3.5.8. The relationship between profit allocation under the section 482 cost-sharing regulations and section 367(d) -- 3.6. Controlled intangibles transfers subject to transfer pricing under the OECD TPG -- 3.7. Concluding comments -- Chapter 4: Introduction to Part 2 -- Part 2 -- Chapter 5: The Historical Development of ­ Profit-Based Trans -- 5.1. Introduction -- 5.2. Development of the US PSM and the contract manufacturer theory through case law -- 5.2.1. Introduction -- 5.2.2. The 1968 regulations and their background -- 5.2.3. Three inbound cases: Nestlé, French and Ciba -- 5.2.3.1. Introduction -- 5.2.3.2. Nestlé (1963); 5.2.3.3. French (1963) -- 5.2.3.4. Ciba (1985) -- 5.2.4. Three outbound cases: Eli Lilly, Searle and Merck -- 5.2.4.1. Introduction -- 5.2.4.2. The historical tax treatment of investments in US ­p -- 5.2.4.3. Eli Lilly (1985) -- 5.2.4.4. Searle (1987) -- 5.2.4.5. Merck (1991) -- 5.2.5. Four roundtrip cases: Bausch, Sundstrand, Perkin and Seagate -- 5.2.5.1. Introduction -- 5.2.5.2. Bausch (1989) -- 5.2.5.3. Sundstrand (1991) -- 5.2.5.4. Perkin-Elmer (1993) -- 5.2.5.5. Seagate (1994) -- 5.2.6. Two cases on controlled services and sales contracts: DuPont (1979) and Hospital Corporation of America (1983) -- 5.3. US legislative and regulatory implementation of "profit-based" methods -- 5.3.1. Introduction -- 5.3.2. The 1986 tax reform -- 5.3.3. The 1988 White Paper -- 5.3.4. The 1994 US regulations -- 5.4. OECD implementation of "profit-based" transfer pricing methodology -- Chapter 6: Metaconcepts Underlying the US and OECD Profit Allocation Rules -- 6.1. Introduction -- 6.2. The relationship between operating profits and the transfer pricing methods -- 6.2.1. Introduction -- 6.2.2. The concept of operating profits -- 6.2.3. Delineating the components of operating profits -- 6.2.3.1. Sales -- 6.2.3.2. Costs of goods sold -- 6.2.3.3. Gross profit -- 6.2.3.4. Operating expenses -- 6.2.3.5. Net profit -- 6.2.4. Information on gross profits may be unavailable -- 6.2.5. Information on transaction-level profits may be unavailable -- 6.3. The relationship between gross and net profit methods -- 6.3.1. Introduction -- 6.3.2. Common methodological traits among the gross and net profit methods -- 6.3.3. Relevant parameters under the gross and net profit methods and their impact on reliability -- 6.3.4. Are operating expenses relevant under the transactional pricing methods (CUT, resale and cost-plus)?; 6.3.5. Are comparability adjustments under the gross profit methods more reliable than under the net profit methods? -- 6.4. Which transfer pricing method should govern the profit allocation among value chain inputs? -- 6.5. The arm's length range -- 6.5.1. Introduction -- 6.5.2. The level of comparability required to include an uncontrolled transaction in the arm's length range -- 6.5.3. On which point within the arm's length range may a reassessment be based? -- 6.6. Comparability -- 6.6.1. Introductory comments -- 6.6.2. The standard of comparability -- 6.6.3. Does the degree to which comparability is required vary among the pricing methods? -- 6.6.4. The relationship between comparability and the rules for determining ownership of intra-group-developed intangibles -- 6.6.5. Comparability factors -- 6.6.5.1. Introduction -- 6.6.5.2. Contractual terms -- 6.6.5.2.1. Introduction -- 6.6.5.2.2. Comparability of contractual terms -- 6.6.5.2.3. Economic substance and non-recognition -- 6.6.5.3. Functions -- 6.6.5.4. Economic conditions -- 6.6.5.4.1. Introduction -- 6.6.5.4.2. Use of comparables from other markets -- 6.6.5.4.3. Location savings -- 6.6.5.4.4. Temporary pricing strategies -- 6.6.5.5. Risks -- 6.6.5.5.1. Introductory comments on risk -- 6.6.5.5.2. Contractual risk allocation among group entities -- 6.6.5.5.3. Risks affect pricing, not the other way around -- 6.7. The aggregation of controlled transactions -- 6.7.1. Introduction -- 6.7.2. The US regulations -- 6.7.3. The OECD TPG -- 6.7.4. GlaxoSmithKline (Canada) -- 6.7.4.1. Introduction -- 6.7.4.2. The factual pattern -- 6.7.4.3. The 2008 Tax Court ruling -- 6.7.4.4. The 2012 Supreme Court ruling -- 6.7.4.5. Observations on the Supreme Court ruling -- Chapter 7: Direct Transaction-Based Allocation of Residual Profits to Unique and Valuable IP: The CUT Method -- 7.1. Introduction; 7.2. The US CUT method -- 7.2.1. Introduction -- 7.2.2. The purported CUT pertains to a transfer of the same intangible as transferred in the controlled transaction -- 7.2.3. The purported CUT pertains to a transfer of a different intangible than that transferred in the controlled transaction -- 7.2.3.1. Introduction -- 7.2.3.2. Direct assessment of profit potential -- 7.2.3.3. Indirect assessment of profit potential -- 7.2.3.4. Assessment of profit potential in other cases -- 7.2.4. There are no CUTs available -- 7.3. The OECD CUT method -- 7.3.1. Introduction -- 7.3.2. Comparability requirements for unique IP under the CUT method -- 7.3.3. Comparability adjustments for unique IP under the CUT method -- 7.3.4. Commercial databases -- 7.3.5. Concluding comments -- Chapter 8: Indirect Profit-Based Allocation of Residual Profits for Unique and Valuable IP: The CPM (US) and TNMM (OECD) -- 8.1. Introduction -- 8.2. A lead-in to the methodology -- 8.3. The scope of application of the methodology -- 8.4. How operating profits may be allocated to the tested party under the methodology -- 8.4.1. Introduction -- 8.4.2. Selecting an appropriate profit level indicator -- 8.4.3. Extracting the profit level indicator data from comparable independent enterprises -- 8.4.4. Applying the extracted profit level indicator data to the tested party -- 8.5. Comparability under the CPM -- 8.6. Comparability under the TNMM -- 8.6.1. Introduction -- 8.6.2. The concept of blended profits illustrated by an example -- 8.6.3. The 1995 consensus text on the TNMM with respect to aggregation of transactions -- 8.6.4. The 2006 comparability report -- 8.6.5. The 2008 discussion draft -- 8.6.6. The final 2010 OECD TPG on the use of aggregated third-party profits as comparables -- 8.6.6.1. Introduction; 8.6.6.2. The first norm: Aggregated third-party profits may be used as comparables as long as they are the result of "similar" third-party transactions
N2  - This book explores how taxing rights to multinationals' business profits from valuable IP shall be allocated among jurisdictions under US and OECD transfer pricing law
UR  - https://ebookcentral.proquest.com/lib/orpp/detail.action?docID=6176423
ER  -