For some time the OECD has been conducting a project on transfer pricing aspects of intangible assets including consideration of the definition and valuation of such assets.  A discussion draft was issued on 6 June 2012 and followed up by a public consultation in November 2012. A revised discussion draft was issued on 30 July 2013 with a number of amendments to the original paper.

The revisions include a new section looking at aspects of the local market and location savings. The section also examines the significance of the assembled workforce, this being a specially skilled or experienced group of employees assembled by the taxpayer that needs to be taken into account in determining arm’s length prices. Effects of the transfer of an assembled workforce between entities and the possible time and cost savings need to be taken into account. The section also looks at the consequences of corporate synergies and how the benefits from synergies are shared between group members. A number of examples are included.

Changes have been made to the explanation in respect of the definition of intangibles. Also a section has been included to the paper relating to transfer pricing aspects of the use of corporate names. Some more examples have been added to the Annex to the paper and some of the existing examples have been revised.

The work on aspects of intangibles and transfer pricing is mentioned as one of the relevant issues in the OECD’s action plan on base erosion and profit shifting. The action plan mentions specifically for example that work will be done to develop transfer pricing rules in respect of intangibles that are hard to value. It is therefore possible that further changes will be made to the draft in response to the developing work on the action plan.

The OECD is inviting comments on the discussion draft from interested parties by 1 October 2013.  A further public consultation is then to be held by the OECD in Paris on 12 and 13 November 2013. Interested parties may consider attending this consultation in addition to responding to the revised discussion draft.