Analysis of Licensing Transactions

Licensing arrangements within corporate groups typically involve trademarks, franchise concepts, and other intangible assets, and they are frequently scrutinised by tax authorities. Our analysis provides an objective assessment confirming that the remuneration agreed between related parties is consistent with the arm’s length principle.

As part of the service, we prepare:

1. Assessment of the nature and justification of the transaction: preparation of a list of materials required for the project,identification of the factual background, including verification of valuation sources for trademarks or other intangibles; if no valuation exists, we can prepare one as a separate deliverable.

‍2. Selection of the appropriate set of comparable data: identification of the relevant data set (internal data or external databases),verification of data availability.

‍3. Benchmarking analysis (CUP method): selection of the appropriate external database (e.g., RoyaltyRange, RoyaltyStat, ktMINE),initial automated filtering based on criteria identified in previous steps (reducing the universe from several million to several thousand results),narrowing the results to a set suitable for manual screening — typically around 150 entities, obtaining the final sample (from 5 to 50 results) and determining both the interquartile and full arm’s-length range.

‍4. Documentation and argumentation: preparation of a draft analysis in Word format, including appendices with financial data and calculations, preparation of conclusions for Local File or Master File documentation, exchange of comments and delivery of the final version (approx. 15 pages in Word + Excel and PDF attachments).

‍Client outcome: the analysis not only confirms compliance with the arm’s length principle but also provides clarity in how licensing transactions are priced within the group, reduces tax-related risks, and prepares the organisation for potential audits.