Mr. Philip Kermode:

The Deputy has put his finger on an important issue in the context of BEPS, which is the relationship between the payments made between group companies and the value creation that they make in different jurisdictions. It is clear that within large corporate groups payments are made for various services and for royalties. It is also clear that one of the issues at the heart of the BEPS discussion is the treatment of intangibles and how one deals with royalty payments from a tax point of view. It is almost impossible to make a judgment on an individual case unless one knows the full details of what is happening, but everybody recognises that the treatment of intellectual property and the transfer pricing rules that apply are a major issue where more clarity is required. We must be able to have rules in place that ensure that the royalty payments made reflect reality and are not just used to shift profits from one jurisdiction to another.