A new concept of intangible assets in the coming of BEPS?

Under Action 8 of the BEPS project (Base Erosion and Profit Shifting) – Aligning Transfer Pricing Outcomes with Value Creation – work was carried out which resulted in certain changes to the OECD guidelines on transfer pricing (Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations), with special emphasis on the theme of intangible assets.

The amendments to Chapter VI of these ‘guidelines’, it is necessary to highlight the redefinition of the concept of intangible assets for the purposes of transfer pricing, the list of examples of various types of intangible assets, as well as to identify the type of transactions involving such assets . The ‘guidelines’ further address the ‘quaestio vexata’ of determining the remuneration of full competition in the linked transactions involving intangible assets, verifying a clear preference for the comparable price method of market or profit fractionation method, detriment of methods based on spending. The former, and in cases where there regarded as broadly comparable do not qualify for identification, they add up certain methods of economic and financial analysis such as the ‘discounted cash flow’. Also noteworthy is the introduction of a new concept concerning the so-called Hard to Value Intangible (HTVI), which can be defined as intangible assets or rights to intangible property which, at the time of transmission between related parties, have certain features such as the lack of reliable comparable, high uncertainty at the level of your income or assumptions regarding expected to take at the time of evaluation. In this regard, it must highlight the introduction of irrebuttable presumptions of compliance with the arm’s length principle, whenever (i) the difference between the projections and the current value of HTVI is not greater than 20%, (ii) when after five years of commercialization, the difference between the initial estimates and the current yield of HTVI does not exceed 20%, or (iii) where the transfer of HTVI have been made under a prior agreement of transfer pricing . In short, given the existing information asymmetry and the long period between the transaction of an intangible asset and its effective analysis in the event of a inspetivo event, the measures suggested by the OECD will allow tax authorities recaracterizar or disregard transactions put up in irrational or atypical market conditions, ensuring that the allocation of income is made according to criteria such as the creation of value or certain requirements of “control”, preventing entities with little functional relevance receive disproportionate returns (as the case of offshore) entities.