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KPMG report: Intangible property transfer pricing in an economic downturn

KPMG report: Intangible property transfer pricing

Transfers of intangible property between controlled parties arise in various contexts, including cost-sharing arrangements, ongoing license arrangements, sales of intangible property, and business restructurings. The pricing of such controlled transactions often raises challenging issues given the difficulty in identifying comparable uncontrolled transactions and the need to factor multiyear benefits into the pricing.


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An economic downturn, such as the one the world economy is experiencing because of the coronavirus, can make some of the challenges with pricing intangible property more pronounced and raise additional issues.

The S&P 500 index and the Dow Jones Industrial Average index saw declines of greater than 15% during March. During the same period, the Financial Times Stock Exchange 100 index saw a decline of almost 15% and the Hang Seng Index saw a decline of 10%. There is a high degree of uncertainty about the duration of the decline in global economic activity. What is clear is that the decline is enormous, at least in the short term, and it could continue.

A report prepared by KPMG transfer pricing professionals discusses the implications of an economic downturn on the pricing of controlled intangible property transfers. Keep in mind that the effect of any significant economic event will vary by company and industry. Thus, the items discussed in this report follow general themes for the overall market and application may differ based on the circumstances for each intangible property transfer.

Read a May 2020 report* [PDF 229 KB] prepared by KPMG Global Transfer Pricing Services professionals in the United States

*This report originally appeared in Tax Notes International (11 May 2020) and is provided with permission of the publisher.

Read a May 2020 report prepared by the KPMG member firm in Switzerland that examines transfer pricing and profit allocation post-COVID-19

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