Royalties paid to the UK entity were not at arms length. TAT No. 395 of 2018

Whether the price of the bank note paper purchased by the Appellant from DLRI is an arm’s length price which includes the cost associated with the know how to manufacture and design the bank note

149. Based on the above analysis, we find that there were no service or intangible assets that warranted a separate charge for a royalty. Indeed, as the Respondent has pointed out that all security features relating to the banknotes were already incorporated on the paper purchased by the Appellant from DLRI to be used to print the banknotes under the contract that the Appellant had with CBK. Further the features to be included in the banknotes was held by CBK. Thus, it is unclear what which IP the Appellant received from DLRI.

150. It was also noted that any management assistance provided such as secondment of employees of DLRI was compensated by payment of a management fee by the Appellant.

151. As such, the Tribunal finds that any technical support or IP provided by DLRI to the Appellant was fully compensated in the price charged by DLRI for the paper on which the banknotes were to be printed.