The Resource Enhanced requirements in the comparability analysis for royalties : U.S. Court of Appeals in the case of Medtronic U.S

Enhanced requirements in the comparability analysis for royalties : U.S. Court of Appeals in the case of Medtronic U.S

Label
Enhanced requirements in the comparability analysis for royalties : U.S. Court of Appeals in the case of Medtronic U.S
Title
Enhanced requirements in the comparability analysis for royalties : U.S. Court of Appeals in the case of Medtronic U.S
Creator
Subject
Language
eng
Summary
The U.S. Court of Appeals remanded the long-drawn litigation proceedings in the case of Medtronic, Inc. versus Commissioner back to the U.S. Tax Court, directing the court to justify its opinion from June 2016. The cited opinion accepted the use of the comparable uncontrolled transaction method (CUT) applied by the taxpayer with certain adjustments, against the use of the comparable profits method (CPM) proposed by the U.S. Internal Revenue Service (IRS). In its decision, the U.S. Court of Appeals has vacated the Tax Court's opinion on grounds of deficiency in demonstrating the comparability of the licensing transaction in question. This article deals with the analysis of the licensing structure adopted by Medtronic, divergent opinions of the parties and the judiciary at various levels, particularly on the nature of the functional profile of the licensee, the content of the comparability analysis and the choice of methods determining the arm's length nature of intangible transactions. It is found that the comparability analysis could have been more robust, although it is acknowledged that the analysis can never be expected to be perfect. The implications of this decision could mark a turning point to the series of losses suffered by the IRS in U.S. Tax Courts and might have a contagion effect on the upcoming court proceedings in the cases of Coca Cola, Amazon and Facebook that have similar licensing structures
Citation source
In: TPI - Transfer Pricing International. - Wien. - Vol. 2 (2018), no. 5 ; p. 266-272
http://library.link/vocab/creatorName
Prasanna, S
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • royalties
  • comparability analysis
  • case law
  • comparable uncontrolled transaction method
  • comparable profits method
  • licensing
  • arm's length principle
  • intangibles
  • transfer pricing
  • tested party
Label
Enhanced requirements in the comparability analysis for royalties : U.S. Court of Appeals in the case of Medtronic U.S
Instantiates
Publication
Label
Enhanced requirements in the comparability analysis for royalties : U.S. Court of Appeals in the case of Medtronic U.S
Publication

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.3736660 4.9336932
Processing Feedback ...