Re:Pandora papers: biggest leak of offshore data exposes fin...
by specialist on Sunday October 03, 2021 @02:41PM
(#28739500)
> We simply hear too much about "selling IP rights" to subsidiaries and similar schemes that are clearly meant to lower tax rather than increase revenue.
Huh. Made me wonder if advocates of IP reform could claim improved tax sanity as a benefit.
Happily, not an original thought.
Here's the first hit via ddg:
Intellectual Property Law Solutions to Tax Avoidance [2015]
"Multinational corporations use intellectual property (IP) to avoid taxes on a massive scale, by transferring their IP to tax havens for artificially low prices. Economists estimate that this abuse costs the U.S. Treasury as much as $90 billion each year. Yet tax policymakers and scholars have been unable to devise feasible tax-law solutions to this problem.
This Article introduces an entirely new solution: change IP law rather than tax law. Multinationals’ tax-avoidance strategies rely on undervaluing their IP. This Article proposes extending existing IP law so that these low valuations make it harder for multinationals to subsequently litigate or to license their IP. For example, transferring a patent for a low price to a tax-haven subsidiary should make it harder for the multinational to demonstrate the patent’s validity, a competitor’s infringement, or entitlement to any injunctions. The low transfer price should also weigh toward lower patent damages and potentially even a finding of patent misuse. Extending IP law in such ways would thus deter multinationals from using IP to avoid taxes. Both case law and IP’s policy justifications support this approach."
Also...
> How can we have free markets when we don't even know who owns what?
Yup. Open markets require symmetrical information.
Huh. Made me wonder if advocates of IP reform could claim improved tax sanity as a benefit.
Happily, not an original thought.
Here's the first hit via ddg:
Intellectual Property Law Solutions to Tax Avoidance [2015]
https://www.uclalawreview.org/pdf/62-1-1.pdf
"Multinational corporations use intellectual property (IP) to avoid taxes on a massive scale, by transferring their IP to tax havens for artificially low prices. Economists estimate that this abuse costs the U.S. Treasury as much as $90 billion each year. Yet tax policymakers and scholars have been unable to devise feasible tax-law solutions to this problem. This Article introduces an entirely new solution: change IP law rather than tax law. Multinationals’ tax-avoidance strategies rely on undervaluing their IP. This Article proposes extending existing IP law so that these low valuations make it harder for multinationals to subsequently litigate or to license their IP. For example, transferring a patent for a low price to a tax-haven subsidiary should make it harder for the multinational to demonstrate the patent’s validity, a competitor’s infringement, or entitlement to any injunctions. The low transfer price should also weigh toward lower patent damages and potentially even a finding of patent misuse. Extending IP law in such ways would thus deter multinationals from using IP to avoid taxes. Both case law and IP’s policy justifications support this approach."
Also...
> How can we have free markets when we don't even know who owns what?
Yup. Open markets require symmetrical information.