Intangible assets developed in multiple locations

Transfer Pricing challenges in the Middle East

An intangible asset’s value, its creation and contribution to a business are challenging to measure because such assets are not physical in nature and exist in contrast to tangible assets.

From the perspective of Multinational Enterprises (MNEs) operating in the Middle East (ME) region, while they may develop or use intangible assets in their operations, dealing with the issue of intangible assets has not always been a top priority. However, recent and impending developments suggest that this will need to change, especially given that the United Arab Emirates, where intangible assets are often developed, will imminently implement a full Corporate Tax regime for the first time. On this basis, the issue of intangibles, tax and Transfer Pricing (TP), is no longer an issue that MNEs can afford to delay or deny.   

In this publication, we look at the issue of the TP and tax challenges of intangible assets in a ME context and the historic approach adopted by the Organisation of Economic Cooperation and Development (OECD). This is in addition to the practical challenges posed for businesses in the region and the best practices for dealing with these challenges.

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