The DEMPE Concept and Its Role in Domestic Transfer Pricing Practice – Report on the United States

The United States participated heavily in the OECD’s BEPS Project, including Actions 8-10, which introduced the DEMPE framework. Yet DEMPE does not exist within the United States’ otherwise extensive transfer pricing legislation, regulations and other guidance concerning controlled transfers of intangible property. As a result, the DEMPE concept has little salience in the purely domestic context. That said, because transfer pricing inherently involves cross-border matters, US taxpayers, tax administrators and courts nevertheless regularly are called upon to interpret DEMPE principles – and, where necessary, reconcile them with US rules. Fortunately, there is considerable substantive overlap between the two.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, Luxembourg, the Netherlands and Spain.