May 28, 2019

International Tax Review Quotes Friedemann Thomma on BEPS Impact on Intangible Assets

1 min

On May 28, 2019, Friedemann Thomma was quoted in International Tax Review (ITR) regarding the Base Erosion and Profit Shifting (BEPS) program's impact on how multinational companies are structuring their intangible assets. According to the article, one of the key achievements of BEPS has been to raise substance requirements in many jurisdictions.

Facing international pressure, the British Virgin Islands (BVI) and Cayman Islands have introduced substance requirements for structures based in their jurisdictions. These standards have implications for companies with trademark portfolios based there. Thomma tells ITR that "everyone is looking at these laws and thinking about how to meet them."

"There are a lot of companies with structures out there that will fall squarely into the purview of these substance requirements," says Thomma. "Some of them will simply have to unwind those structures."

Companies will have to build up research and development (R&D) functions to keep assets in the Caymans, meaning the BVI and Caymans will become less popular locations for IP assets.

"I don't know of any companies that are truly monetizing their IP in the Cayman Islands," says Thomma. "You think we're suddenly going to hire 2,000 people to staff an R&D team in the Caymans? Who is going to do that?"