Perspectives

Situational analysis

Aligning business strategy and tax planning for intellectual property

​As businesses seek new ways to drive revenue and profits while effectively managing cash flow and costs, effective IP tax planning is a smart idea. It can help companies create substantial value while helping them address and manage tax-related risks.

Tax implications of intangible assets

Few companies can create value without relying on intellectual property (IP)—the often invisible assets they can’t weigh or lock in a safe, but which set them apart from their competitors.

Business strategies that help build, protect and monetize IP are a common focus for large organizations. Too often, however, these same organizations neglect to align the way they manage their IP with their global tax planning.

Failing to address the tax implications of intangible assets can lead to very palpable consequences.

  • Poorly structured IP management may cause profits to build up in high-tax jurisdictions.
  • Without careful planning, moving intangible assets across borders or among business entities may elevate transfer pricing risks and tax liabilities.
  • Mergers and acquisitions can leave IP in places where owning it costs too much and it delivers too little value.
  • Poor planning of IP management or poor documentation of IP inventory and use, may invite regulatory challenges.
  • Tax planning not attuned to the business may lead to costly government challenges.

 

Intellectual property tax planning

The result can be not only a higher global tax burden, but also limited ability to make effective critical business decisions on an after-tax basis.

Few business leaders have the time to consider IP on its own as an important business issue. They’re absorbed in the real-life scenarios that determine the success of the company. Alright, then: What about those scenarios?  

In the brochure available for download, we’ll examine a few common examples and see how IP tax planning needs to be part of the calculus.  

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