Cost Sharing and the Acrobatics of Arm’s Length Taxation

20 Pages Posted: 2 Aug 2010

See all articles by Yariv Brauner

Yariv Brauner

University of Florida Levin College of Law

Abstract

The United States’ cost sharing regime enables multinational enterprises to export United States intangible property to low or no tax jurisdictions, essentially tax-free. This is in stark contrast to long standing United States policy, and the explicit tax agenda of the Obama administration. Two recent cases have circumvented attempts by the IRS to mitigate cost sharing based tax avoidance. This article explains the regime, how the insistence of the IRS on arm’s length based transfer pricing rules contributed to the current non taxation of foreign income of United States multinational enterprises, and explores alternative reforms.

Keywords: Transfer Pricing, Arm's Length, Formulary Apportionment, Cost Sharing, Buy-in, Valuation of Intangibles

JEL Classification: F23, H20, K34

Suggested Citation

Brauner, Yariv, Cost Sharing and the Acrobatics of Arm’s Length Taxation. Intertax, Forthcoming, University of Florida Levin College of Law Research Paper No. 2010-19, Available at SSRN: https://ssrn.com/abstract=1651334

Yariv Brauner (Contact Author)

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States
3522730949 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
667
Abstract Views
2,638
rank
54,295
PlumX Metrics