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.

https://www.steelldy-indices.com

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:

where: λ IAS is typically between 20% and 35% depending on the importance of intangible assets in the analyzed group. The IAS Score (0-100) is calculated using the following formula:

Methodology for analyzing intangible assets: mapping patents, trademarks, software, and data using databases like Espacenet and USPTO; automated DEMPE analysis via NLP and graph analysis; benchmarking royalty rates using CUP or TNMM; calculating GloBE impact by adjusting income per jurisdiction after TP adjustments; quantifying top-up tax risk (QDMTT and IIR) through Monte Carlo simulation.