Author: Angelo Chirulli

Introduction: The Growing Role of DEMPE in Transfer Pricing Intangible assets, such as patents, trademarks, and proprietary technology, have become a dominant source of corporate value. According to Ocean Tomo’s Intangible Asset Market Study (2020), intangible assets account for over 90% of the market value of the S&P 500. This shift has led to growing scrutiny from tax authorities, who seek to ensure that profits from these assets are taxed in the jurisdictions where economic value is created. The OECD’s DEMPE framework—which evaluates the Development, Enhancement, Maintenance, Protection, and Exploitation (DEMPE) of intangibles—has become a key tool in determining how…

In an increasingly interconnected global economy, multinational corporations often establish subsidiaries in low-tax jurisdictions to optimize their tax positions. However, tax authorities worldwide have implemented Controlled Foreign Company (CFC) legislation to prevent profit shifting and base erosion. According to the OECD, base erosion and profit shifting (BEPS) initiatives are estimated to cost governments between $100–$240 billion annually, representing 4–10% of global corporate tax revenues. Source: Home | IBFD A notable example highlighting the impact of CFC rules is the case of Apple Inc., which faced scrutiny from the European Commission for allocating profits to offshore entities, resulting in significant tax adjustments. Source:…