Transfer Pricing Challenges in the Digital Economy - Part 2: A Case Study of the Internet of Things
Tax Management International Journal, 2019
12 Pages Posted: 9 Jul 2019
Date Written: June 30, 2019
The OECD's BEPS project 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 Niraja Srinivasan and Srini Lalapet of Dell Technologies and Lorraine Eden of Texas A&M illustrate the complexities and challenges posed by digital business models. The first article explored the digital economy and the OECD's work on BEPS Action Item 1 (taxing in the digital economy). This second article 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, taxation, OECD, BEPS
JEL Classification: F23, H26, H25, K34, L11, 033
Suggested Citation: Suggested Citation