Trademark valuation for transfer pricing

Client

Holding company with its subsidiaries in UK and EU.

Objective

To estimate the market value of a trademark for confirmation of transfer pricing.

Approach

The examination of international transfer pricing for conducting a controlled transaction required assessing the market value of a well known trade mark. Swiss Appraisal consulted with the Board of Directors, developed, successfully defended the requisite regulatory justifications, and assessed the transfer price value to the recipient.

Swiss Appraisal valued our client's trademark for each of its subsidiaries, in various markets worldwide. We calculated the tax implications of each transaction and confirmed compliance of the transfer price to the market price within each controlled transaction.

According to the OECD (Organization for Economic Co-operation and Development) leadership on transfer pricing, Swiss Appraisal applied:

• A method of comparable market prices, under which market rates of royalty in the industry were compared between independent entities;
• A method of comparable profitability in which the profitability of a subsidiary was compared after royalties were paid to the market level of profitability of the licensee's companies after payment of royalties to an independent entity.

Results

The price range of the market value of the rights of use for the trademark was obtained, within the range of which was formed the price of the transaction for transferring individual rights of use of their intellectual property.

Swiss Appraisal prepared valuation reports of the Holding's trademark in accordance with the International Valuation Standards for submission to the tax authorities in EU contries and UK.



Return to the list of projects