Transfer pricing: intangibles and intellectual property

The OECD and tax authorities advocate the use of comparable arrangements between independent parties to price intellectual property on an intercompany basis. However, by definition, intellectual property is unique and therefore on a practical level it is difficult if not impossible to find comparable arrangements. The OECD with its recent update to the Transfer Pricing Guidelines suggests that the profit split method is now close to being 'on a par' with the traditional methods. This approach is supported and advocated by this article.