Local R&D and DEMPE can change the royalty analysis

The main issueThe legal owner is only one part of the IP value story.

Map the actual DEMPE activities and decision-making around the IP.

Identify local R&D expenditure, teams, risks and valuable improvements.

Check whether improvements are used elsewhere in the group.

Consider whether the chosen pricing method captures multiple valuable contributions.

TPRoyalty note

This is a concise research note, not a substitute for the facts and legal or transfer-pricing requirements of a particular case.

Issue themes also discussed in VSTN Consultancy's public note on transfer-pricing issues for royalty transactions. Open public reference ↗