Multinational Companies In The Intangible Asset Transactions, Transfer Pricing-making Process

With rapid technological advances and emergence of internal transactionsof intangible assets within multinational companies, intangible assets areplaying an increasingly crucial role to a corporation's core competency, inparticular their sales and marketing functions. Accordingly, the transfer pricingdetermination process for intangible assets is claiming more and moreattentions both internally and externally.However, the pricing of intangible assets bears primarily three difficulties,namely separability difficulty, comparable search difficulty and retroactiveadjustment difficulty, which calls for a distinctive determination process oftransfer price for intangible assets. This dissertation analyses the aforesaidprocess under such three different transaction types as R&D contract, jointdevelopment and licensing.Beginning with the basic definition of transfer price and the fundamentaltransaction principle, conforming to the international regulations, and based onthe arm's length principle, this dissertation tries to implore a reasonable,effective and efficient process for the transfer price arrangement of intangibleassets in multinational companies. Economic analysis, and especially thefunctional analysis as part of the process comprise the major portion of thewhole thesis. In addition, pricing difficulties arising from intangible assetstransactions are addressed, and possible solutions are recommended.