New tax law’s impact on intangibles

BVWireIssue #186-4
March 28, 2018

intangible property, transfer pricing, intangible valuation, intangible, Tax Cuts and Jobs Act

Under the new tax law, intangibles are more broadly defined than under prior law. Everything that is not tangible is considered intangible and taxable under the new law, including goodwill, according to Kash Mansori and Guy Sanschagrin, who are both with WTP Advisors. During a recent webinar on transfer pricing, they pointed out that this new definition has an important impact on the valuation of intangible property transferred across borders. With few exceptions, just about everything of value will be taxed.

IRS crackdown: The IRS and tax authorities of other countries are going after ill-prepared small and medium-sized firms over transfer pricing issues, they say. The IRS has two initiatives related to transfer pricing in its recent list of Large Business and International (LB&I) division campaigns: one on related party transactions and the other on in-bound distributors. Among the advice  Mansori and Sanschagrin gave during the webinar is that just because a company was audited in the past does not mean the IRS has OK’d its transfer pricing policies and results. Also, transfer pricing has (at least) two sides, so consult with local transfer pricing specialists.

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