Beyond intangibles: the next few years of transfer pricing

November 2026 | SPOTLIGHT | CORPORATE TAX

Financier Worldwide Magazine

November 2026 Issue

The last decade in transfer pricing (TP) has focused largely on intangibles – including patents, know-how, brand, customer relationships and technology – and the now familiar development, enhancement, maintenance, protection and exploitation (DEMPE) of such intangibles.

Following the Organisation for Economic Co-operation and Development’s base erosion and profit shifting initiatives, the DEMPE concept fundamentally shaped how tax authorities approached cross-border profit allocation. Legal ownership of intangibles was not enough for TP purposes. The focus was on the economic ownership and, more importantly, on the people making decisions about the intangibles, controlling risks and performing functions that generated value.

As a consequence, structures, companies and transactions involving intangibles came under intense scrutiny. Tax authorities examined where strategic decisions were made, who exercised control over economically significant risks and whether profit allocations reflected the commercial reality of the business. Intangibles were at the centre of planning, documentation and controversy management.

None of this is changing overnight; intangibles remain a cornerstone of TP policies. What is changing is the ‘broadening of the debate’.

Today, multinational enterprises (MNEs) face a very rapidly evolving business environment. Geopolitical uncertainty, technological disruption, artificial intelligence (AI), evolving operating models and increased transparency obligations are all reshaping how businesses create and sustain value.

The key TP challenge is no longer simply identifying who owns and controls valuable intangibles. It is understanding the broader set of factors that affect value creation, drive competitive advantage and determine whether profit allocation reflects those realities. As groups redesign activities and supply chains, deploy new technologies and reconsider governance structures, TP is becoming inseparable from broader business decision making.

The central question is gradually evolving from ‘who owns and controls the intangibles?’ to ‘what drives value in the business, and who controls the people, capital, assets and risks responsible for creating it?’

The shift is likely to shape the next generation of TP analysis and disputes.

The intangibles debate is evolving, not disappearing

Recent TP discussions and disputes have placed greater emphasis on financing, substance and risk control. That should not be mistaken for a decline in the importance of intangibles.

Historically, TP disputes focused on identifiable assets such as patents, trademarks or proprietary technology. These assets remain important, but value creation in many businesses is now more complex and globally integrated.

Competitive advantage increasingly stems from a combination of technology, data, organisational know-how, digital platforms, customer ecosystems, AI capabilities and operational expertise. In many cases, value no longer resides in single identifiable assets, but in the interaction and combinations between different assets, functions and capabilities across the organisation and across countries.

Business transformation adds a further layer of complexity. As companies centralise functions, automate processes and redesign operating models, the identity and location of key value drivers often change. At the same time, remote working arrangements and increasingly decentralised management structures can make it harder to demonstrate where strategic decision making occurs and where risks are genuinely controlled.

Future focus is less therefore on intangible names and labels, and more on the practical questions of value drivers within the MNE and its interdependencies.

Financing: capital as a TP battleground

Intercompany financing arrangements are rapidly moving up in the TP risk agenda. Tax authorities are devoting greater attention to intercompany loans, guarantees, cash pooling arrangements, treasury centres and captive finance vehicles. The debate is no longer confined to pricing. Increasingly, it extends to commercial rationale, governance and substance.

Historically, many MNEs treated financing as a largely technical exercise. Once an arm’s-length interest rate had been established, the analysis was often viewed as complete.

That approach is becoming more difficult to defend. Tax authorities now ask more fundamental questions. Who makes the financing decisions? Who controls the deployment of capital? Which entity has the capability to assess and manage financial risks or capacity to absorb losses? Where are the key treasury functions performed?

These questions mirror the themes that emerged from the DEMPE framework: control, substance and value creation. Groups that devoted significant governance resources to intellectual property arrangements may now need to apply the same discipline to treasury and financing activities. Treasury policies, decision-making processes and contemporaneous evidence of risk management are becoming increasingly important in defending financing structures.

For many MNEs, financing may prove to be one of the most contentious TP issues of the next decade.

Value chain transformation and TP

Multinational operating models are being reshaped by forces that have little to do with tax. Geopolitical tensions, tariffs, supply chain disruption, security concerns and technological change are prompting businesses to reconsider long-established operating structures. These developments inevitably carry TP consequences.

When functions are relocated, regional hubs established, decision making centralised or customer-facing activities redesigned, the existing TP model often needs to be reconsidered. Profit allocation needs to reflect the different ways value is generated within the business. More fundamentally, transformation can alter the relative importance of the different value drivers.

One recurring challenge for TP is the pace of commercial transformation, which has to be matched by the tax analysis. Business leaders are rightly focused on growth, resilience, efficiency and market opportunities. TP considerations should be in sync with the process.

Tax authorities, on the other hand, are increasingly reviewing transformations holistically. Their focus extends beyond the changing functions and risks to understanding how the business creates value before and after the transformation.

TP, therefore, is becoming a core component of transformation projects, rather than a post-implementation exercise.

Business restructurings return to centre stage

Closely linked to the broader business transformation is the renewed significance of business restructurings and transfers of taxable value.

Many MNEs are reassessing operating models designed for a different economic and regulatory environment. Principal structures, regional platforms and centralised operating arrangements are being revisited in light of digitalisation, geopolitical developments and the introduction of global minimum taxation.

What is changing in the current business restructurings is the character of the value being transferred. Increasingly, value is embedded in integrated business capabilities rather than discrete assets. Workforce expertise, customer relationships, digital capabilities, operational know-how and organisational structures may collectively account for much of an enterprise’s value and potential transfer in a business restructuring context.

As a result, future disputes are unlikely to focus solely on valuation methodologies of transferred assets during business restructurings. The commercial rationale for the restructuring, the value factors transferring and the factual evidence supporting the restructuring, are equally important.

In practice, a compelling factual narrative during a business restructuring is often more persuasive than an elegant economic model.

Substance and evidence become the critical differentiators

Perhaps the most significant development across TP and across countries in recent years has been the growing importance of evidence. Functional analyses, benchmarking studies and TP documentation remain essential.

However, tax authorities now operate in an environment characterised by rich primary and processed information and data. Country by country reporting, intercompany transaction schedules, international information exchange and sophisticated analytical and AI tools now provide tax administrations with significantly more information than was available a decade ago. As a result, TP disputes increasingly turn on what can be demonstrated rather than what can be asserted.

Board minutes, investment committee papers, treasury records, business cases, governance frameworks, internal presentations and management reports have become important evidential tools. Tax authorities want to understand how decisions were made in practice, not merely how organisational charts and contracts suggest they should have been made.

The next generation of disputes is therefore as much about factual evidence as economic analysis. The issue is often not whether a TP report reaches a technically supportable conclusion. It is whether the underlying facts support that conclusion.

TP is increasingly becoming an evidential exercise, as much as an economic one.

Pillar Two is now part of the conversation

The introduction of Pillar Two has changed the tax landscape for many MNEs and may affect how profits are ultimately taxed, particularly where they arise in lower-tax jurisdictions. It does not, however, determine why those profits arise in a particular jurisdiction in the first place. Those questions remain firmly within the scope of TP.

As groups adapt to a Pillar Two environment, the issues discussed throughout this article become even more relevant. Decisions around capital allocation, financing, operating model design, business restructurings, governance, substance and risk control continue to shape where profits are allocated under TP principles.

Before any Pillar Two impact can be assessed, MNEs must first be able to explain and evidence the commercial reality underpinning their TP outcomes. In that respect, Pillar Two has reinforced the importance of TP rather than diminished it.

TP renewed

TP was once viewed as a specialist discipline largely confined to tax departments and external advisers. That perception is becoming harder to maintain.

Decisions relating to capital allocation, treasury centralisation, operating model redesign, business restructurings, technology investments and risk management all carry significant TP implications. Consequently, TP has become relevant far beyond the tax function.

Chief financial officers, treasurers, general counsels, business leaders and boards are increasingly drawn into TP discussions because the underlying questions go to the heart of how a business is organised and managed.

The businesses best positioned for the future are unlikely to be those with the most sophisticated TP structures on paper. Rather, they will be those able to align tax outcomes with commercial reality, and demonstrate that alignment through effective governance, robust documentation and credible evidence.

TP is no longer merely about pricing transactions. It is increasingly a discussion about how businesses deploy capital, manage risk and make strategic decisions.

Looking ahead

The defining TP question of the last decade was which entity in an MNE controlled valuable intangibles. That question has not disappeared, but it no longer captures the full complexity of the challenges facing MNEs.

Over the coming decade, businesses will continue to navigate geopolitical uncertainty, supply chain reorganisation, technological evolution, evolving workforce models and the increasing demands of tax transparency and Pillar Two. These developments are reshaping how businesses operate, where decisions are made and, ultimately, how value is created.

For tax authorities, the focus is likely to continue shifting toward substance, governance and evidence. As access to information improves and scrutiny intensifies, taxpayers will be expected not only to explain how profits have been allocated, but also to demonstrate how those allocations reflect the way the business operates.

In that sense, the future of TP is not simply about pricing transactions or attributing returns to intangible assets. It is increasingly about understanding how businesses respond to economic, technological and geopolitical change, and ensuring that the tax outcome aligns with that commercial reality.

Stephanie Pantelidaki is a partner, Carlos Garcia Cuesta is a senior transfer pricing and tax adviser and Dominic Stuttaford is global head of tax at Norton Rose Fulbright. Ms Pantelidaki can be contacted on +44 (0)20 7444 3069 or by email: stephanie.pantelidaki@nortonrosefulbright.com. Mr Cuesta can be contacted on +44 (0)20 7444 3392 or by email: carlos.garciacuesta@nortonrosefulbright.com. Mr Stuttaford can be contacted on +44 (0)20 7444 3379 or by email: dominic.stuttaford@nortonrosefulbright.com.

Stephanie Pantelidaki, Carlos Garcia Cuesta and Dominic Stuttaford

Norton Rose Fulbright