Digitisation Trends and Use of the Profit Split Method

28 January 2019
Yves Hervé, Philip de Homont

Managing Director Dr. Yves Hervé and Associate Director Philip de Homont have published “Digitisation trends and use of the profit split method” in the February edition of International Tax Review. It is the fifth article in their series on transfer pricing technical challenges and solutions brought about by the changing regulatory and economic landscapes for global multinational entities. Here, the authors explain how digital business models are making it more difficult to separate the value creation of individual group companies connected though vastly increased information flows. New transfer pricing systems will need to account for these business models, including for the creation and impact of complexly linked intangibles. The authors’ next article in their series will show how transfer pricing methods can be applied in this context.

Read the previous article in the authors' series here.