Abstract Intellectual Property (IP) is emerging as an important asset, contributing to innovation, economic growth and global trade. The global economy has also digitalized at an unprecedented rate, transforming the methods of IP creation, its management and trade. This transaction brings forth complex taxation challenges related to IP transactions. This paper explores the intersection of IP and taxation, emphasising the challenges and opportunities in cross‐border IP transactions. It seeks to analyse the key taxation issues related to IP in the context of international trade, including transfer pricing, direct tax implications, and global tax reforms aimed at addressing harmful tax practices. Further, in examining the major “Base Erosion and Profit Shifting” (BEPS) risks in direct taxation, the paper delves into preferential tax regimes, transfer pricing risks, and artificial internal trading of intangibles. The OECD and G20's BEPS Action 5 project on harmful tax practices and their implementation in India are also critically analysed. This helps in examining how these global frameworks are addressing the tax challenges posed by IP. Finally, the paper examines key aspects of IP taxation in India, discussing relevant domestic frameworks and international agreements that shape India's approach to tax IP. Issues such as licensing, royalties, transfer pricing policies, and GST implications for IP transactions are explored. By addressing these key areas, the paper highlights the need for effective tax policies that align with the realities of the digital economy and international trade.
Kanakshi Nema (Tue,) studied this question.