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AstraZeneca: transfer pricing recharacterisation 'threat’ hinders corporate activity

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The ‘threat of recharacterisation’ of transactions where there are no direct comparables is ‘viewed as a significant blocker to corporate activity and growth’, AstraZeneca has claimed.

Its use ‘needs to be limited to exceptional circumstances lacking any commercial basis,’ the company submitted in its response to an OECD consultation on the scoping of a new project, set to begin next year, on the transfer pricing aspects of intangibles.

PwC said it recognised that there was a wide range of potential definitions and interpretations of the terms intellectual property, intangible property and, more generally, intangibles.

‘However, as our representatives considered a number of the issues the discussion kept returning to the question of whether something was or, more frequently, was not an intangible.

'An exact definition of all intangibles is likely to prove difficult and setting out the characteristics of intangibles may prove more worthwhile. In this regard, the use of case  studies and illustrations of what is and (importantly) what is not an intangible would be welcomed,’ the firm said.

Grant Thornton UK LLP said one of the most significant issues encountered in practice was ‘consideration of when an intangible is low value and routine and what makes it high value and non-routine, with the transfer pricing implications that follow from that analysis’.