Tag: License of intangibles

Denmark vs H Group, April 2019, Tax Tribunal, Case No. SKM2019.207

Denmark vs H Group, April 2019, Tax Tribunal, Case No. SKM2019.207

Intangibles had been transferred from a Danish subsidiary to a US parent under a written agreement. According to the agreement the Danish subsidiary – which had developed and used it’s own intangibles – would now have to pay royalties for the use of trademarks, know-how and patents owned by the US parent. The tax authorities had issued an assesment on the grounds that the majority of the Danish company’s intangibles had been transferred to the US parent. In the assesment the value of the intangibles had been calculated based on the price paid when the US group acquired the shares in the Danish company. H Group argued that the transferred intangibles no longer carried any value and that the Danish company now used intangibles owned by the US group. The Tax Tribunal found that tax authorities had been entitled to make an assessment as the transaction had not been described in the Transfer pricing documentation. However, the Tribunal considered that the valuation ... Continue to full case
Tokyo District Court, judgment of November 24 2017

Tokyo District Court, judgment of November 24 2017

A Japanese company had entered into a series of controlled transactions with foreing group companies granting services and licences to use intangibles – know-how related to manufacturing and sales, training, and provided support by sending over technical experts. The company had used a CUP method to price these transactions based on select “internal comparables”. Tax authorities disagreed with the company and found that the residual profit split method should be applied to price the transactions. The court found the transactions should be aggregated and that the price should be determined for the full packaged deal – not separately for each transaction. The foreign related-party transactions were compared – as a whole – to the comparable transactions selected by the company and the court found that the product lines, how to use them and frequency of dispatching employees to support the foreing group company were not comparable. This could have resulted in differences the value of the intangibles and services provided ... Continue to full case
Georgia Pacific Corp vs. United States Plywood Corp, May 1970

Georgia Pacific Corp vs. United States Plywood Corp, May 1970

This case is about valuation (not transfer pricing as such) and is commonly referred to in international valuation practice. In this decisions, the following 15 factors were relied upon to determine the type of monetary payments that would compensate for a patent infringement: 1. The royalties received by the licensor for licensing the intangible, proving or tending to prove an established royalty. 2. The rates paid by the licensee for the use of other similar intangibles. 3. The nature and scope of the license, such as whether it is exclusive or nonexclusive, restricted or non-restricted in terms of territory or customers. 4. The licensor’s policy of maintaining its intangible monopoly by licensing the use of the invention only under special conditions designed to preserve the monopoly. 5. The commercial relationship between the licensor and licensees, such as whether they are competitors in the same territory in the same line of business or whether they are inventor and promoter. 6. The ... Continue to full case