Intangible Assets Case Study

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2.3 Intangible assets as value drivers for businesses Intangibles are seen as the main driver of value for many companies, this process is aided by advancements in information and communication technologies. (UN 2015) Investments in intangibles have thus become a fundamental source of continuing profitability and increased market share for leading corporations. Most of the industrialized economies are becoming knowledge based with many businesses building competitive advantage in form of intangible knowledge based assets such as Research and development, brand equity and human and organizational capital. For many of these businesses intangible assets equal or exceed physical assets like buildings and machines. (Lekhi 2009) Firms are investing historically unprecedented amounts of money in the creation of intangible assets, new ideas, technologies, designs, brands organization know how and business models. Patenting abroad is the main driver of worldwide patenting. Growth and international royalty and licensing payments and receipts are growing (WIPO 2011) It is not surprising therefore that subsidiaries in Uganda are …show more content…

They argue that MNEs have an incentive to relocate intangible property to low tax countries in order to tax the accruing rent at a low rate because they are perceived to be the value drivers of firm profit and they can easily be separated from other production units of the group. Uganda’s corporate tax rate is 3o%, which in comparison to tax havens is a high rate. For this reason most of the profits generated in Uganda are ‘shifted’ away using payments like royalties to low tax

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