Summary
This document is a technical report that discusses the increasing significance of DEMPE analysis in the context of taxation, particularly concerning intangible assets and intra-group transactions. It outlines the focus of tax administrations worldwide, including Italy, on the proper allocation of profits associated with the use of intangible assets. The report details the five DEMPE functions: development, enhancement, maintenance, protection, and exploitation, which are essential for determining the contributions of various entities within a multinational enterprise (MNE) group. The report emphasizes that mere ownership of an intangible asset does not justify retaining all benefits derived from its exploitation. It also presents recent case law in Italy, highlighting the varied application of DEMPE analysis by courts and the challenges faced by tax authorities in enforcing OECD Transfer Pricing Guidelines. The document concludes by illustrating the complexities involved in assessing the remuneration of intangibles and the implications for MNEs in complying with tax regulations.
