Transfer Pricing and IP Location: Research Reveals the Real Motivators

Revelations that Google paid only A$74,000 in Australian taxes last year, despite generating around A$1.1 billion from local customers, have put the spotlight on multinationals and taxation. With the federal government's newly updated transfer-pricing rules, which affect the way corporations can shift profits between countries, there's a sharper eye on where organisations locate intangible assets, such as intellectual property (IP). Research by Michael Walpole of the Australian School of Business and Nadine Riedel of Oxford University finds tax authorities can be overly suspicious of what motivates companies in their choice of IP location. Their decisions may be influenced by far more than tax.