Brand management centres in the age of BEPS

Mon Nov 30 16:32:20 EST 2015
By. Philip de Homont and Alexander Voegele

In the third of a series of articles in International Tax Review on intangibles, NERA Principal Philip de Homont and Affiliated Consultant Dr. Alexander Voegele analyzed the taxation of the value created when brand management centers (BMCs) develop the brands and trademarks of multinational companies.

In the article, “Brand Management Centres in the Age of BEPS,” which appeared in the November 2015 issue of the tax journal, Mr. de Homont and Dr. Voegele warned that the value created by BMCs will be heavily scrutinized by tax authorities, especially considering their recent discussions around Base Erosion and Profit Shifting (BEPS). According to the authors, taxpayers should be able to prove that the BMC creates actual value through its own activities, rather than merely fosters synergies, and that the BMC activities are controlled and managed by the multinational company’s own personnel at its place of business.

The article also provided two examples of cases where quality economic analysis supported BMCs, allowing clients to reap significant tax savings, while fully adhering to new recommendations from the Organisation on Economic Co-Operation and Development and not falling subject to BEPS-related measures.