The IP Exodus: Profit Shifting through Intellectual Property Holding Structures and the Challenges of Effective Regulation

Intangible assets—intellectual property foremost among them—have, in the wake of digitalization, emerged as the dominant source of value in modern enterprises. Their virtually unlimited geographic mobility renders them the preferred instrument of international tax planning. Through the deliberate transfer of IP rights to low-tax jurisdictions by means of IP holding structures, multinational enterprises divert substantial profits from taxation in high-tax jurisdictions. This undermines the fiscal capacity of the affected states and threatens the social legitimacy of a tax system that places domestic enterprises and private individuals at a structural disadvantage. The present article analyses the architecture of classical IP holding structures, the countermeasures established at the international and European Union level, and the entrepreneur structure as a sophisticated adaptive strategy designed to circumvent existing anti-avoidance norms. The analysis reveals that reactive regulation invariably lags behind structural innovation. The aim is to demonstrate that sustainable containment requires the entrenchment of the principle of taxation at the place of actual value creation as a binding foundational norm of international tax law, alongside sufficient multilateral coordination to overcome the divergence of national interests.