Companies, Governments Clash Over Who Owns Intellectual Property

Tax authorities are increasingly challenging intellectual property ownership and its use in a company’s multinational structure after merger and acquisition transactions.

Governments are concerned that following an acquisition, companies are transferring ownership of lucrative IP assets out of the country without paying their fair share to the jurisdiction upon exit.

Practitioners say tax administrations are keying in to which entities in a company’s structure are taking risks and making decisions about the use of the intellectual property—be it a parent company or its newly acquired affiliate—to determine a company’s appropriate transfer pricing position based on where they believe value is ...