My team has developed a software in the states that will now be transferred to a foreign jurisdiction for US
Software: Transfer to Foreign Jurisdiction (IRC Section 482)
Answers
Hi. You may be transferring appreciated property, especially if the dev cost was written off, in which case it will have zero tax basis. You may need a valuation to determine the taxable US gain on transfer. Appreciation thereafter may benefit from lower tax rates in the new jurisdiction, especially if it has favorable taxation of profits from IP (e.g. Ireland's 12.5% rate, UK's Patent Box regime).
1
Thanks a lot for your answer. This is exactly what I have found on my research. I know that I may be asking too much, but does someone know of a good valuation firm? (Payment processing tech)
Since I've done transfer pricing work for Mark, please feel free to ask him for his recommendation (preferably offline). Typically, unless you have NOLs to shelter the gain, this would be structured as an outbound license with an ongoing royalty.
Please see my profile for contact information or do an internet search on my name and keywords "transfer pricing".
Jake
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