Do multinational companies have effective transfer pricing systems of intangible assets and e‐commerce?

Purpose – The purpose of this paper is to investigate the way that multinational companies can design effective transfer pricing systems of intangible assets with special consideration of the effect of e‐commerce within the restricted regulations of tax authorities of American and Foreign governments. Design/methodology/approach – The new trends in transfer pricing and the nature of intangible assets are discussed. Different strategies of multinationals' ownership techniques are examined. The selection of the appropriate transfer pricing methods is analyzed. Findings – The paper concludes that the most effective transfer pricing system should include: tax and non‐tax strategies to manage global earnings of the company; objectives behind the system; potential global income tax consequences; selection of the best transfer pricing method; and key issues to help in avoiding tax audits in the future. Originality/value – This paper fulfills an urgent need for an effective transfer system of the e‐commerce to meet tax regulations of different countries.