Transfer Pricing Challenges in the Digital Economy - Part 1: Hic Sunt Dracones?
Eden, Lorraine, Niraja Srinivasan and Srini Lalapet. 2019. Transfer Pricing Challenges in the Digital Economy: Hic Sunt Dracones? Tax Management International Journal, 48 (June 14): 1-5.
5 Pages Posted: 9 Jul 2019 Last revised: 9 Oct 2019
Date Written: June 30, 2019
"There may be dragons" in the OECD's BEPS project, which mandated that transfer pricing outcomes under the arm's length standard should be aligned with value creation. In the digital economy, new business models are challenging transfer pricing practitioners on how best to apply the value creation approach. In a two-part series Lorraine Eden of Texas A&M and Niraja Srinivasan and Srini Lalapet of Dell Technologies illustrate the complexity of digital business models and the challenges they create for conducting transfer pricing analysis. Part 1 explores the digital economy and the OECD's work on BEPS Action Item 1 (taxing in the digital economy). Part 2 is a case study of the Internet of Things (loT}, which builds and uses a stylized transfer pricing analysis to explore the transfer pricing challenges posed by an loT ecosystem.
Note: Reproduced with permission from Bloomberg Tax (June 14, 2019). Copyright 2019 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.
Keywords: transfer pricing, digital economy, internet of things, OECD, BEPS
JEL Classification: f23, h26, h25, k34, l11, 033
Suggested Citation: Suggested Citation