Munich, 11 May 2011 – Intangible assets make a substantial contribution to the total value of a company. Globalisation is increasingly giving rise to non-transparent structures, with a corresponding level of complexity in the overall interaction between tax, law etc. If a dispute also emerges between the partners, a business disaster can quickly develop.

In many cases an alliance between two firms as a joint undertaking at international level offers the prospect of an enormous financial leap. Despite all the ideas about expansion, however, it is always essential to bear in mind the tax and legal implications and to assess them correctly. In a worst-case scenario, one or other right may become subject to dispute if inadequate protective steps are taken. The loss of a patent right, for example, could possibly result in unprotected use of patents. Technologies could then be used by anyone, i.e. including competitors. This could lead to inferior quality or even dangerous goods being sold under a reputable name.

There is a high level of damage, i.e. business losses, which German companies suffer each year due to non-observance of patent protection rights. "Especially in the context of global business operations and transfer activities, aspects such as trademark or patent ownership must be clarified from a legal and tax viewpoint", says Dr Arwed Crüger, WTS GROUP in Frankfurt.

Negative aspects may also arise in relation to tax, e.g. if a company is faced with unbudgeted tax burdens when intangible assets are transferred. For example, if undisclosed reserves are raised (when economic goods that had been acquired against payment are capitalised, and which had previously been acquired without payment or produced by the company itself), this may possibly give rise to an obligation to make back-payment.

While tangible assets include physically available, palpable assets, intangible assets are the non-physical capital of a company. Examples include production processes, distribution and exploitation rights, trademark names, licences, patents or the customer base. The fact that intangible assets have a high value is particularly important in global business transactions. This has been demonstrated in the case of China or India. Uncertainty when dealing with patent rights has presented major difficulties, despite highly promising market opportunities.

On 12 May (Hamburg) and 10 June 2011 (Frankfurt), law and tax experts will highlight special aspects and provide an overview of "Intangible assets from a legal and tax viewpoint".

A seminar on "Transfer pricing in theory and practice from the viewpoint of companies, consulting firms and tax authorities" also presents new developments in the field of transfer prices. The dates for this event are 23 May (Düsseldorf) and 24 May 2011 (Munich).

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Press Release (PDF)

 Dr. Arwed Crüger, PhD in Economics, Head of WTS "Transfer Pricing" competence area in Frankfurt