Abstract:
In the current economic scenario, where globalization plays a relevant role, multinational groups tend to exploit all the chances given by the market in order to maximize their profits, through tax evasion, tax incentives, double non-taxation phenomena. When multinationals put in place transactions between associated enterprises, a transfer price is established for the transfer of goods, intangibles or the provision of services. An instrument that can be used by these groups so as to reduce taxation consists in manipulating the transfer prices by shifting profits towards lower taxation countries. This phenomenon represents the so-called transfer pricing. In order to counteract such phenomenon, the OECD (Organization for Economic Cooperation and Development) has developed a principle able to identify the transfer price between associated parties, the arm’s length principle, which considers the companies of a group as they would be independent enterprises.
Nowadays, the transfer pricing phenomenon is even more challenging because of the involvement of intangibles in infra-group transactions. The increasing emergence of these difficult to evaluate assets has led to the development of aggressive tax planning schemes that created the BEPS phenomenon (Base Erosion and Profit Shifting). In order to prevent the mentioned schemes, the OECD created the BEPS Project (the Action Plan BEPS), which provides Actions 8 to address the evaluation of intangibles in the transfer pricing context.
