On 13 September 2018, the Swedish tax authority published an update of transfer prices guidance on intangible assets consistent with OECD’s difficult-to-measure intangible assets (HTVI) guidance.
The OECD HTVI Guidance offers tax authorities with a tool to evaluate intangible assets according to the arm’s length principle. Therefore, if the actual income or cash flows are significantly higher or lower than the expected revenues or cash flows on which the pricing is based, it is assumed that the tax authorities are likely to demonstrate that the estimated revenues or cash flows used in the original valuation were higher or lower.
Under the HTVI rules, the tax authorities may need to adjust income. Revenue adjustments that apply to HTVI not only relate to the transfer price, but may also affect the application of alternative pricing structures that differ from those of the taxpayer.
The procedures should contribute to the OECD’s aim of increasing country-to-country equality in the application of the HTVI Guidelines. In that way it will reduce the risk of double taxation. In this context, the tax authorities mention the possibility of applying for a price notification.
