In late November, USCIB submitted comments on an Internal Revenue Service proposal to improve how it treats shared development costs among multiple parties of intellectual property and other intangible products. A letter by USCIB’s Taxation Committee expressed concern that the proposed regulations would not bring clarity to this crucial issue.
”The valuation of intellectual property contributed to a cost sharing arrangement is among the most difficult transfer pricing issues facing both companies and tax administrators,“ said Michael Mason, a partner at PricewaterhouseCoopers who chairs USCIB’s Transfer Pricing Subcommittee. “However, we are concerned that the proposed regulations fall short of their intended goal of providing greater clarity” to such matters.
At December 16 IRS hearings, Joseph Andrus of PricewaterhouseCoopers, appearing on behalf of USCIB, urged that IRS rules reflect real-world behavior, and be consistent with the “arm’s length” standard, the foundation of transfer pricing. He also expressed concern over the definition of intangible property reflected in the proposed regulations.
“This has the potential to exacerbate the incentives of U.S. business to conduct R&D programs and build research staffs outside of the U.S., with a resulting loss of high quality U.S. employment,“ said Mr. Andrus.
The USCIB letter to the IRS is available at: www.uscib.org/index.asp?documentID=1448. For more information, contact Andrea Fava (212-703-5047 or afava@uscib.org).
|
OECD Initiatives in International Taxation – The OECD, USCIB and BIAC, in cooperation with several other groups, will hold a third annual conference on the OECD’s international taxation initiatives, June 5-6 in Washington, D.C. The event will provide an opportunity for U.S. business representatives to interact directly with key representatives from the OECD’s Center for Tax Policy and Administration well as senior tax officials from the U.S. and other OECD countries. For more information, contact Andrea Fava (212-703-5047 or afava@uscib.org).
|
