NEW YORK, NY (PRWEB) — Keystone Strategy, an economics and strategy consulting firm, provided economic and technical support to several testifying experts on behalf of Amazon in the recent $1.5 billion tax transfer pricing dispute with the Internal Revenue Service (IRS) which resulted in a favorable outcome for Amazon.
At issue in this case were the tax implications related to how Amazon valued the intangible assets required to run their European website business, transferred from Amazon U.S. to a European subsidiary. In his March 23, 2017, ruling, U.S. Tax Court Judge Albert G. Lauber rejected the IRS’s position that the intangible assets had a perpetual or “indefinite” useful life and should be valued jointly as a whole business using a discounted cash-flow based analysis (Amazon.com Inc. & Subsidiaries v. Commissioner of Internal Revenue, 148 T.C. No. 8, Docket No. 31197-12, March 23, 2017). Amazon’s experts argued that the intangibles should be treated as three distinct collections of assets (website technology, marketing intangibles, and customer information), each with its own value based on its useful life.
Working closely with Amazon and its representing law firms Morgan, Lewis & Bockius LLP and Skadden, Arps, Slate, Meagher & Flom LLP, Keystone partnered with four academic experts whose collaborative work was instrumental in evaluating the transferred intangible assets, determining their useful life, and the appropriate decay rates upon which royalty rates were calculated. As part of the ruling, the judge agreed that the transferred intangible property had a finite useful life.
The Keystone experts that supported Amazon are:
Keystone is an innovative strategy and economics consulting firm that delivers transformative ideas to the market. The company partners with Fortune 500 companies on leading-edge challenges in science, technology, and business. The firm’s Tax Practice provides deep technical, economic, and engineering knowledge on such topics as technology valuation, economic and Industry analysis, product pricing, and valuation of marketing and other intangibles. Keystone regularly combines the strategic insights of leading experts from Harvard, Stanford, MIT, Wharton and other top universities with the practical industry expertise of its accomplished professionals. Learn more about Keystone at http://keystonestrategy.com.