[INTM440110] Transfer pricing: Types of transactions: intangibles: what are intangibles?
What are intangibles for transfer pricing purposes?
It is more straightforward to grasp the concept of transactions involving physical, or tangible, goods. If a house constructed by a property development company would be sold by estate agents to the public at £500,000 then it is easy to spot that this is the arm's length price, and the sale of the house is the provision and the underlying transaction.
Business is not just concerned with the sale of tangible goods, however. The sale or exploitation of intangibles is equally important.