An arm’s-length approach to trademark royalty rates
The transfer of intangible property may have a material effect on domestic taxes. While estimating trademark royalty rates for intercompany transfer pricing is fraught with difficulty, it can be helpful to adopt a systematic approach
Valuation analysts are often called on to estimate arm’s-length trademark royalty rates as part of tax-related intercompany transfer price analyses. This article summarises the regulations for transfer pricing for federal income tax purposes and describes the intangible property intercompany transfer price methods which can be used to evaluate whether transactions between members of controlled groups satisfy the arm’s-length standard. It then offers insight into factors to consider when estimating trademark royalty rates for intercompany transfer price analyses, with a particular focus on comparability factors for selecting market-based transactional data.
Want to read more?
Register to access two of our subscriber only articles per month
Subscribe for unlimited access to articles, in-depth analysis and research from the World Trademark Review experts
What our customers are saying
World Trademark Review is simply the first resource I will go to for trademark-related information, whether about the latest trademark law development or case news, top trademark practitioners or interesting trademark events.
Jerry F Xia
Deputy general counsel and chief IP counsel – Asia-Pacific, corporate law department
Subscribe to World Trademark Review to receive access to the full range of trademark intelligence, insight, and case law, as well as our guides, rankings and daily market insight delivered to your inbox.