IP Migration – Tax Planning and Tax Policy

Profit shifting by means of systematic transfer of valuable Intellectual Property to special IP-Holding companies is very popular and has been in the public focus for many years. The aim of the project is to analyse the different concepts to prevent the erosion of the national tax base through tax motivated business structures which are based on the cross-border transfer of valuable intangible assets.

To examine the different possible approaches a country comparison including Germany, the United States, Luxembourg, the Netherlands, and India is included. In principal three ways to deal with the problem can be identified. Highly industrialised countries such as Germany and the US try to keep the tax base by introducing special anti-avoidance rules and tightening up their transfer pricing regulations. Other countries such as Luxembourg and the Netherlands promote themselves as an IP-holding jurisdiction by introducing beneficial tax regimes for income from IP and try to justify these regimes with the promotion of R&D. Emerging countries such as India who are also badly affected by profit shifting activities of MNEs are relying more on withholding taxes and are even planning to increase them.

The main objective is to make deficits of the existing rules clear to the legislative body and to encourage improvements, taking into account the experiences from other countries as well as findings from economic scholars.

This ZEW Research Seminar will be held in German.