The DEMPE Concept and Its Role in Domestic Transfer Pricing Practice – Report on Luxembourg

The pricing of intra-group transactions involving intangibles in line with the arm’s length principle has drawn the attention of multinational enterprises, tax authorities and tax advisers across the board. Following the Base Erosion and Profit Shifting Project of the OECD, several countries have implemented legislative provisions concerning the taxation of intangibles, e.g. the treatment of patent boxes and licence payments. The aim of this article is to analyse the interpretation and application of the transfer pricing rules on intra-group transactions concerning intangible assets and the DEMPE concept in Luxembourg.This article is part of a special issue of the International Transfer Pricing Journal on the DEMPE concept in domestic transfer pricing practice. The other articles include the General Report and contributions on Belgium, France, Germany, Ireland, Italy, Korea, the Netherlands, Spain and the United States.