Caroline Silberztein said any work would have to look at issues such as valuation and economic ownership. Intangibles are considered in article 12 of the OECD's Model Tax Convention and chapter 6 of the
organisation
's transfer pricing guidelines.
Silberztein
was speaking during a session on intangibles characterisation at the two-day OECD Global Forum on Tax Treaties and Transfer Pricing. The panel, which was chaired by Anita Kapur of the Ministry of Finance in India and also included Carmine Rotondaro of Gucci, Isabel Verlinden from PricewaterhouseCoopers and Steve Musher of the Internal Revenue Service in the US, considered the different definitions of what an intangible is, such as for legal, accounting and tax purposes, and characterisation issues under nine different situations, such as technical support, workforce in place, location savings and profit potential.
The panel concluded that there are different definitions of intangibles for different purposes and in different countries; that the treaty definition is important for withholding tax purposes; that intangibles are often confused with value drivers or value enhancers, that not all intangibles are unique and valuable and that the relevant question may not be “is this an intangible” but “is this something that would be remunerated at arm's length and how”.
Tax directors and advisers would welcome a focus on intangibles that produced consistent global
guidance,
if the opinion of one practitioner that spoke to International Tax Review in Paris is shared widely.
“If you want something to put you to sleep, then read article 12,” he said. “I don't know what it's talking about.”
The two-day event brought together more than 650 tax directors, officials and advisers from 99 countries and
organisations
, including the UN, the World Customs Organisation and the West Africa Economic and
Monetary Union
. The sessions also covered adjustments, documentation, interest deductibility, attribution of profits, transfer pricing in a downturn economy, transfer pricing and customs, and recent litigation.
