Most companies hold Intellectual Property Rights (IPRs) of some sort. They might have been acquired or developed internally. When they might consider licensing the use its IPR to external parties or companies within the group, an IP holding company can be set up to centrally manage these activities. If the IPRs are transferred to a company that is based in a beneficial tax regime, the tax burden can significantly be reduced.
So when you structure the ownership of your IPRs adequately and when you channel your license payments, it can lead to significant tax benefits.
A number of other benefits that an IP holding company can have for you are by placing your IP in one entity you are able to streamline the internal processes for inter-group licensing. Cross-jurisdictional tax issues become simpler as you will be regularly licensing IP between the same jurisdictions.