How Do You Spell DEMPE?
Pronunciation: [dˈɛmp] (IPA) 
Correct spelling for the English word "DEMPE" is [dˈɛmp], [dˈɛmp], [d_ˈɛ_m_p] (IPA phonetic alphabet).
Pronunciation: [dˈɛmp] (IPA)
Correct spelling for the English word "DEMPE" is [dˈɛmp], [dˈɛmp], [d_ˈɛ_m_p] (IPA phonetic alphabet).
DEMPE refers to the acronym for "Development, Enhancement, Maintenance, Protection, and Exploitation." It is a framework used in transfer pricing, which refers to the pricing of transactions between related entities within multinational enterprises. Developed by the Organisation for Economic Co-operation and Development (OECD), DEMPE provides guidance for determining the appropriate allocation of profits and functions within a multinational enterprise's value chain.
"Development" encompasses activities relating to the creation of intangible assets, such as research and development, design, and generation of intellectual property. "Enhancement" focuses on activities that increase the value or quality of intangible assets already in existence, such as improvements or updates. "Maintenance" comprises activities to preserve the functionality and value of intangible assets. "Protection" involves activities to safeguard and enforce legal rights associated with intangible assets, including patents, copyrights, and trademarks. Lastly, "Exploitation" covers activities related to the commercial utilization of intangible assets, including marketing, distribution, and sale.
The DEMPE framework is essential in determining the appropriate remuneration for each related entity involved in the creation, ownership, and utilization of intangible assets. By considering the value contribution and economic substance of each activity within the value chain, DEMPE helps in ensuring fair and arm's length pricing of transactions between related parties. These guidelines assist governments, tax authorities, and multinational enterprises in avoiding aggressive tax planning and achieving a more equitable allocation of profits among jurisdictions.
