Intangible Asset Shifting (IAS) Module

The Real Asset Shifting (RAS) module (www.steelldy-indices.com) focuses on tangible assets, notably cross-border real estate. However, intangible assets (patents, trademarks, software, know-how, databases, client lists) are historically the main channel for profit shifting in multinational groups. Unlike tangible assets, intangibles do not significantly benefit from the Substance-based Income Exclusion (SBIE), are highly sensitive to transfer pricing adjustments (royalty rates), and directly impact GloBE Income without substantial offset in top-up tax calculations. The extension Intangible Asset Shifting (IAS) Module enables PSI (Profit Shifting Index) to cover the entire profit shifting spectrum, from real to intangible assets.

Conceptual framework of the IAS Module

The IAS Module uses the DEMPE analysis (Development, Enhancement, Maintenance, Protection, Exploitation) to identify risks from artificial localization of IP revenues. It measures the gap between applied royalty rates and arm’s length benchmarks, the impact of these gaps on the GloBE Effective Tax Rate, and the risk of top-up tax from locating intangibles in low-ETR jurisdictions.

Integration into the PSI formula

The IAS Score is integrated into the overall PSI formula as follows: