When companies consider transferring intellectual property rights or other intangible assets to low-tax countries to optimize tax expenditures, they must strictly comply with national laws and regulations and follow international tax compliance principles (such as the OECD's BEPS Action Plan). The following are some legal and compliance strategic frameworks, but the specific operations must be designed by professional tax consultants according to the actual situation of the enterprise.： --- ### **1. Cross-border reorganization of intellectual property (IP)** -**Transfer of IP ownership**: To transfer the legal ownership of IP from a high-tax jurisdiction to a low-tax jurisdiction (such as Ireland, Singapore, the Netherlands, etc.), a reasonable transfer price must be determined based on the Arm's Length Principle to avoid being recognized as a profit transfer. -**Cost sharing agreement (CSA)**: Jointly develop IP with related parties in low-tax jurisdictions and share costs. Future benefits will be distributed according to the agreement, and commercial substance and reasonable pricing need to be proved. ### **2. Establish a holding structure in low-tax jurisdictions** -**Intermediate holding company**: Establish an intermediate holding company in countries with preferential tax treaties (such as the Netherlands and Luxembourg), and use the agreement to reduce withholding taxes or deferred taxes. -**IP licensing structure**: The IP is held by a low-tax entity and royalties are collected from subsidiaries in high-tax jurisdictions (subject to transfer pricing rules). ### **3. Take advantage of the tax incentives system** -**Patent Box policy**: Register a patent in a country that provides IP tax incentives (such as the United Kingdom and Belgium) and enjoy tax relief. -**Regional concessions**: Such as Singapore's IP Development Incentive Plan (IDI), it provides a low tax rate on eligible IP income. ### **4. Transfer pricing compliance** -**Function and risk analysis**: Ensure that IP-related functions (R&D, management, risk-taking) match profit distribution to avoid being challenged. -**Document preparation**: Prepare transfer pricing information (local documents, master documents, country reports) for the same period to prove that the transaction complies with OECD guidelines. ### **5. Business substance requirements** -**Avoid the risk of "shell companies"**: Allocate personnel, office space and decision-making functions in low-tax jurisdictions to meet economic substance laws (such as the requirements of the European Union, the BVI, and the Cayman Islands). ### **6. International tax treaty planning** -**Avoid double taxation**: Use tax treaties to reduce withholding tax rates (such as through a network of agreements in the Netherlands or Switzerland). -**Permanent institution (PE) risk control**: Ensure that IP management activities do not constitute a taxable existence in high-tax jurisdictions. ### **7. Exit Tax considerations** -Some countries (such as the United States and EU member states) impose exit taxes on cross-border IP transfers, and the cost needs to be assessed in advance. --- ###**Key precautions** -**Anti-tax avoidance regulations**: National CFC rules (controlled foreign companies), DIVERSIFIED PROFITS TAX (UNITED KINGDOM), GILTI (UNITED STATES), etc. MAY restrict tax benefits. -**BEPS 2.0**: After the implementation of the global minimum tax (15%), the effect of the traditional low-tax structure may weaken, and the strategy needs to be adjusted dynamically. -* *Professional consultants intervene**: It is necessary to design a structure with tax, legal, and financial experts to ensure compliance with the whole process. --- ###**Example structure (simplified)** 1. **R&D centers**are located in tax-advantaged countries (such as Singapore) and costs are shared through CSA agreements. 2. **IP ownership** Belongs to the Irish subsidiary and charges other subsidiaries through license agreements. 3. **The Dutch holding company** As the middle tier, uses EU directives to reduce withholding taxes on royalties. --- **Important note**: Tax optimization must be premised on real business purposes to avoid aggressive tax avoidance. It is recommended to regularly review the compliance of the structure and pay attention to the latest developments of the OECD, the European Union and national tax authorities.