Working Paper Revision

Taxation and the Global Allocation of Intangibles

Abstract: We study how international tax systems shape the global allocation of intangible assets. Firm-level data show that cross-border patent ownership transfers respond strongly to tax differentials, especially within multinational firms, while arm’s-length transfers are more closely associated with intellectual property rights (IPR) protection. We develop a model in which patent owners choose whether to license, sell, or transfer patents to a foreign affiliate, linking tax rates, IPR protection and transfer-pricing wedges to patent location. Counterfactuals suggest that tax harmonization and stronger enforcement reduce profit shifting and expand the US royalty tax base, whereas a global minimum tax has limited effects.

JEL Classification: F12; O33; O41; O47;

https://doi.org/10.20955/wp.2025.025

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2026-05-21

Number: 2025-025

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