The information provided below is for academic and general discussion purposes only and is in no way a substitute for professional legal, tax or accounting advice. Before implementing any restructuring or transfer pricing arrangement, it is important to consult with experienced international tax advisors, transfer pricing experts and legal advisors to ensure that the relevant arrangements comply with all applicable legal and regulatory requirements. Cross-border restructuring of intellectual property rights for tax optimization generally involves the following aspects (only the main ideas are outlined): 1. Consistent economic substance and business purpose • It is necessary to ensure that there are real business reasons for changing asset ownership and internal pricing adjustments, rather than simply for tax avoidance. Tax authorities often focus on whether the restructuring complies with market principles and economic substance requirements. • Establishing a business structure that reflects actual activities such as risk-taking, R&D, management and marketing is the key to ensuring the legality of the restructuring. 2. Asset valuation and pricing methods • First, conduct an independent and market-based valuation of the intellectual property rights to ensure that the amount used in the transfer and restructuring process reflects the true business value. • Follow internationally recognized transfer pricing principles (such as the "arm's length principle") and methods (such as comparable uncontrolled price method, income method, etc.) to provide an objective basis for internal allocation or licensing pricing. • Prepare detailed transfer pricing documentation to meet the review requirements of tax authorities in various countries and reduce the risk of future adjustments. 3. Structural design and asset ownership • Consider setting up a subsidiary or special purpose entity with actual business activities and sufficient operational support in a low-tax jurisdiction and transferring the intellectual property to this entity. • This arrangement usually involves the design of "contribution pricing" or "licensing agreement", that is, the parent company transfers or licenses the intellectual property generated by R&D results to the subsidiary at a price that meets market conditions, and the subsidiary then obtains income, thereby realizing profit recognition in a region with a lower tax rate. • When designing, it is necessary to consider the requirements of various countries on "substantial restructuring", anti-abuse rules and the BEPS (profit erosion and profit shifting) action plan. 4. Tax regulations and compliance requirements • When involving multi-country tax issues, it is necessary to pay attention to the specific provisions of the tax laws of various countries on cross-border transactions and restructuring, as well as information sharing and anti-tax avoidance measures in international cooperation. • Pay special attention to the target region's rules and requirements on the use of intellectual property, licensing fees, royalty deductions and transfer pricing, and ensure that the arrangement complies with the tax system of both the source country and the destination country. • Some jurisdictions may be cautious about restructuring based solely on tax rate differences and require sufficient economic substance and operational support. 5. Risk Management and Continuous Monitoring • Even if a preliminary restructuring plan is constructed, internal control and continuous monitoring mechanisms must be established to ensure that sufficient evidence can be provided in future tax audits to prove that the restructuring arrangement has commercial substance. • With the continuous development of international tax rules, especially the BEPS framework and the escalating anti-tax avoidance measures of various countries, the relevant structures and pricing methods also need to be dynamically adjusted. Summary: To migrate intellectual property to a jurisdiction with a lower tax rate through internal repricing, the key is to design a business restructuring plan that meets both the actual business needs and tax compliance requirements. It involves sufficient asset valuation, pricing arrangements that meet arm's length transaction conditions, reasonable international structure design, and strict documentation and risk management. This process is very complex, and with stricter regulations around the world, any omissions may lead to future tax disputes or sanctions. Once again, the above opinions are for reference only and do not constitute professional advice. Before making any major corporate structure or tax arrangements, please be sure to seek detailed evaluation and advice from experts in multiple fields.