Because it may be difficult to find comparable transactions involving the outsourcing of such important functions, it may be necessary to utilise transfer pricing methods not directly based on comparables, including transactional profit split methods and ex ante valuation techniques, to appropriately reward the performance of those important functions. Where the legal owner outsources most or all of such important functions to other group members, attribution to the legal owner of any material portion of the return derived from the exploitation of the intangibles after compensating other group members for their functions should be carefully considered taking into account the functions it actually performs, the assets it actually uses and the risks it actually assumes under the guidance in Section D. 1.2 of Chapter I. Examples 16 and 17 in the Annex I to Chapter VI illustrate the principles contained in this paragraph.
TPG2022 Chapter VI paragraph 6.57
Posted on | By OECD
Category: OECD Transfer Pricing Guidelines (2022), TPG2022 Chapter VI: Special Considerations for Intangibles | Tag: Control functions, Decision making, DEMPE, DEMPE functions, Example 16, Example 17, Important decisions, Intangibles, Legal owner, Marketing, Outsourcing, Ownership, Valuable functions
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