Introduction

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Introduction

Dear readers,

The global transfer pricing practice of Deloitte Touche Tohmatsu Limited is pleased to present a collection of articles on different aspects of transfer pricing particularly focused on intangibles.

As OECD's transfer pricing guidance in Actions 8, 9 10 and 13, issued as part of the Base Erosion and Profit Shifting (BEPS) Project, continue to take centre stage in transfer pricing planning and documentation, in this guide, we provide valuable insights into some of the most significant challenges that multinational corporations (MNCs) face with respect to transfer of intangibles and, in particular, in identifying and assigning value to intangibles.

In the first article, Applying the profit split method, Alan Shapiro, Eunice Kuo and Anis Chakravarty, discuss the OECD's non-consensus discussion draft on proposed changes to the transactional profit split method. They observe that the tone of the discussion draft suggested the broad applicability of profit splits to integrated value chains. Their main takeaway, however, from the supplemental guidance on value chain analyses provided in the discussion draft is the casting of a value chain analysis as a delineation tool for a specific transaction, rather than as a justification to apply a profit split on every integrated MNE operating through a global value chain. This is a significant change in direction from the non-consensus draft on profit splits, which suggested the latter rather than the former.

In the second article, The OECD hard-to-value intangible guidance, Philippe Penelle attempts to understand where the concepts in the hard-to-value intangible (HTVI) guidance came from, and explains what the views of the US government have historically been in connection with the arm's-length nature of such concepts. That discussion will encompass a simple theoretical discussion of the use of ex post results to assess the arm's-length nature of ex ante pricing as a means to set up one commonly cited reason to believe that the HTVI guidance may, in fact, go beyond the arm's-length principle, as commonly understood or interpreted. Ultimately, the article provides useful insights as to what to expect from the OECD HTVI guidance, based on lessons learned from the US experience with the commensurate income standard and the periodic adjustment rules.

The third article focuses on OECD guidance on transfer pricing documentation (Action 13) which requires multinational corporations to identify where and how value is created in business operations. In their article, Value chain analysis, Shanto Ghosh and Arindam Mitra outline the key approach to a value chain analysis and how one may apply economic principles to determine the ex post split of the consolidated contribution margin in a global value chain taking into consideration the economic risks being borne by the various entities within an MNC. Their novel methodology allocates the ex post contribution margin (or revenue) among the sub-units of an integrated supply chain based on the relative modified operating leverage of the sub units. The result is a reasonable arm's-length approximation of the allocation of profits within an MNC that are aligned by the creation of value within the MNC's integrated supply chain.

Although the guidance in the non-consensus discussion draft on proposed changes to the transactional profit split method provides a reasonable foundation on which the OECD member states can build upon in the next release, which is expected in the next few months, it is hoped that OECD will provide additional clarification in a number of areas, including better coordination with its valuation guidance on intangibles.

Navigating the world of transfer pricing is not easy. We hope this guide provides you with useful insights into the transfer pricing of intangibles. If you have any questions, or would like to engage in a discussion, please contact the Deloitte transfer pricing professionals featured in this guide.

Mark Nehoray

Partner

more across site & shared bottom lb ros

More from across our site

While rarely the sole driver of a combination, tax is becoming an increasingly important part of firms' efforts to keep up with client expectations
New research, which suggests LLMs can silently corrupt complex documents, should alert tax and legal teams relying on AI to handle iterative drafting and compliance workflows
Maintaining increased funding for HMRC is a ‘high possibility’ if he becomes PM, ITR has also heard
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2026 Europe Tax Awards
The firm has hired a team of private client lawyers from Withers to launch in New York and Connecticut, though ITR analysis suggests it faces stiff competition
The ability of tax authorities to receive and analyse data is becoming ‘quite advanced’, warns Stuart Lang, head of EY’s compliance co-sourcing solution
The Court of Appeal ruling clarifies that treaty benefits are not abusive where transactions are commercially driven, providing greater certainty on “main purpose” anti-avoidance tests
Despite the Netherlands featuring an unusual concentration of World Tax-ranked technology-led providers, sources believe there’s a long way to go to challenge the established players
Ethics seems to be playing a subservient role to an entitlement culture borne out of a pervasive ‘revenue at all costs’ mentality at the big four
Historical World Tax data suggests the ‘largest law firm merger in history’ may not pose a serious threat to the world's leading tax practices
Gift this article