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How to reliably estimate arm’s-length prices for buying and selling intangible assets within a group of related companies is quickly becoming the hottest topic in transfer pricing. Transfer pricing practitioners apply certain valuation techniques to establish reliable intercompany prices. However, due to the limitations of increasingly complex and integrated value creation processes, standard transfer-pricing methods in many applications cannot be applied reliably to intercompany transactions involving intellectual property. In this article from International Tax Review’s Intellectual Property Supplement, the members of NERA’s Global Transfer Pricing Practice discuss various methods for the valuation of intellectual property and note that, in complex cases, it is often necessary to combine several valuation techniques, depending on the specific industry and market situation.

This article first appeard in the fifth edition of International Tax Review’s Intellectual Property supplement. For more information, please visit www.internationaltaxreview.com.