CSAs may allow multinationals realise benefits of intangible asset investment
March 25, 2009
Multinational companies have several different options to compensate controlled entities that own valuable intangibles used by other affiliates, explain Nobuo Mori, Vladimir Starkov, and Yuko Saito of NERA Economic Consulting
Multinational companies often face a location mismatch between intangible asset ownership and usage. Some of the most common situations of this type are when overseas manufacturing affiliates use the technology created in the home country or sales affiliates use the marketing intangibles created by the parent company. When the owners and users of valuable intangibles are located in different taxing jurisdictions, the question of the arm’s-length compensation of the intangible owners becomes a vital part of transfer pricing compliance for the multinational enterprise.
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