Useful Life Issues in Transfer Pricing

For multinational enterprises having to conduct business restructurings in Germany, the existing regulations and guidance are causing problems, including high exit charges and the risk of double taxation. One major aspect in that regard is that the German tax legislation assumes an indefinite time frame of capitalization for the valuation of business restructurings, unless reasons can be provided for a definite useful life.

In their article “Valuation of Business Restructurings in Germany – Part II: Economic Life of Intangible Assets”, authors Andreas Riedl of wts and Tyll Stechmann of Houlihan Lokey elaborate on the determination of useful lives of intangible assets in business restructurings, and its impact on taxation and transfer pricing. Among other, they make reference to an analysis conducted by MARKABLES on the remaining useful life of trademarks. The article was published in International Transfer Pricing Journal, July/August 2022. The full article can be downloaded here.

MARKABLES provides useful life data for all different types of intangible assets. Such lifing data is used by valuation and tax professionals from all all over the globe.