RoyaltyRange premier quality royalty rate reports contain a detailed functional, risk and asset analysis. Each royalty rate report provides an overview of functions performed with respect to the development, enhancement, maintenance, protection and exploitation of intangibles (DEMPE).
(Extract from an actual RoyaltyRange royalty rates report)
RoyaltyRange data is fully compliant with the recommendations under the final Action 8 report on Transfer Pricing Aspects of Intangibles, released by the Organization for Economic Co-operation and Development (OECD) pursuant to the Action Plan on Base Erosion and Profit Shifting (BEPS) published on 5th of October of 2015.
Under the arm’s length principle, each member of the multinational enterprise group should receive arm’s length compensation for the functions it performs. In cases involving intangibles, this includes functions related to the development, enhancement, maintenance, protection, and exploitation of intangibles (DEMPE). The identity of the member or members of the multinational enterprise group performing functions related to the development, enhancement, maintenance, protection, and exploitation of intangibles (DEMPE), therefore, is one key consideration in determining prices for controlled transactions and in determining which entity or entities ultimately will be entitled to returns derived by the multinational enterprise group from the exploitation of intangibles.
In considering the arm’s length compensation for functional contributions of various members of multinational enterprise group, certain important functions will have special significance. These functions may include, among others, design and control of research and marketing programmes, strategic decisions regarding intangible development programmes, and management and control of budgets; defence and protection of intangibles; ongoing quality control over functions performed.
Because the important functions described above are often instrumental in managing the different functions performed, assets used, and risks assumed that are key to the successful development, enhancement, maintenance, protection, or exploitation of intangibles (DEMPE), and are therefore essential to the creation of intangible value, it is necessary to carefully evaluate transactions between parties performing these important functions and other associated enterprises.
The determination of the arm’s length compensation for functional contributions should consider and depends on the availability of comparable uncontrolled transactions. The RoyaltyRange premier quality data addresses this requirement and contains all information instrumental to your DEMPE analysis.
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