Category: Transfer pricing

India: Rules To ‘Secondary Adjustment’ Rationalized And Clarified

The concept of 'Secondary Adjustment' was introduced in Finance Act 2017 by introducing new Section 92CE in the Indian Income Tax Act (the Act) to align transfer pricing provisions with international best practices. ... - Continue reading

Ireland Budget 2020 released

On 8 October, the Irish government announced its Budget 2020 measures. Brexit and climate change are core themes of new revenue measures and expenditure commitments. Brexit remains the foremost immediate concern for the Irish economy, whereas tackling climate change requires long-term commitments to tax and spending policies. ... - Continue reading

The Fiat and Starbucks state aid tax cases: an absolute loss for legal certainty.

In late September, the EU General Court released its decisions in two long-awaited state aid appeals: Fiat (cases T-755/15 Luxembourg v Commission and T-759/15 Fiat Chrysler Finance Europe v Commission) and Starbucks (cases T-760/15 Netherlands v. Commission and T-636/16 Starbucks and Starbucks Manufacturing Emea v. Commission). ... - Continue reading

Australian tax office advises on transfer pricing for offshore drilling

The Australian Taxation Office (ATO) on September 27 set out its approach to analyzing transfer pricing issues associated with the use in Australian waters of non-resident owned mobile offshore drilling units such as drill-ships, drilling rigs (including but not limited to submersibles, semi-submersible and jack-up rigs), pipe-laying vessels, and heavy-lift vessels. ... - Continue reading

Saint Amans provides update on digital tax reform effort

The preliminary results of an impact assessment reveal that proposals advanced in an OECD-led effort to update the global rules for taxing digital businesses would not create large changes to countries’ existing taxing rights, Pascal Saint-Amans, OECD Director of the Centre for Tax Policy and Administration, said September 11. ... - Continue reading

Colombia: Colombia Publishes Guidelines On Advance Pricing Agreements

Colombia's National Directorate of Taxes and Customs (DIAN) released detailed guidelines (the Guidelines) to clarify the procedure for Advanced Transfer Pricing Agreements (APAs) requests in order to ensure certainty between the parties regarding their transfer pricing arrangements. ... - Continue reading

Canada: Transfer Pricing: What’s New In Canada (Part II)

Transfer pricing disputes in Canada have, predominately, been resolved through either a request for competent authority assistance under the Mutual Agreement Procedure ("MAP") of a treaty, or, to a much lesser extent, through the notice of objection process with CRA Appeals.  Regardless of the recent increase in transfer pricing cases being brought before the Courts, the MAP will likely continue to be the dispute resolution process most often utilized by a Canadian corporation in transfer pricing cases because, in the absence of a 100% reversal of a transfer pricing adjustment by either CRA Appeals or a Canadian court, economic double taxation may still exist as a consequence of the CRA upward transfer pricing adjustment. The correlative relief provided by the treaty partner under a MAP settlement resolves that double taxation. ... - Continue reading

Australia provides arm’s length debt test guidance

The Australian Tax Office on 28 August, released its awaited draft guidance contained in Practical Compliance Guideline 2019/D3, on applying the arm’s length debt test contained in Division 820 of the Income Tax Assessment Act 1997, Australia’s thin capitalization statutory provisions.   ... - Continue reading

FBR demands Rs992m from TV channel in alleged tax evasion case

ISLAMABAD: The Federal Board of Revenue (FBR) has served a notice on ARY Communications Limited (ARY) and raised a tax demand of Rs992 million – alleging that the entity had evaded tens of millions in taxes through misrepresentation, concealment and misuse of exemptions, thereby causing a substantial loss to the… – Continue reading

Transfer pricing: DGIT starts analysing potential cases of MNCs

The Directorate General of International Taxes of the Federal Board of Revenue (FBR) has started analysing a few potential multinational companies’ cases of transfer pricing where companies are directly involved in shifting their profits outside the country without payment of any taxes. In this regard, Directorate General of International Taxes… – Continue reading

CIAT’s transfer pricing “Cocktail” provides solutions for transactional net margin method overuse

In recent years there has been a major public outcry for governments to take action to force multinational groups to pay a fair share of tax in the jurisdictions where their economic activities take place and to stop shifting profits to offshore tax havens. ... - Continue reading

US appeals court sides with Amazon in $1.5 billion transfer pricing dispute

A US federal appeals court on Friday affirmed the Tax Court’s decision in Amazon, ruling that cost sharing buy-in payments made by Amazon’s Luxembourg subsidiary in exchange for Amazon’s transfer of intangible property should not include compensation for transferred residual business assets such as workforce in place, goodwill, and going concern value. ... - Continue reading

Worldwide: OECD Public Consultation Document And Public Commentary On The Tax Challenges Of Digitalisation

In February and March of 2019, the OECD organized a public consultation process, releasing a consultation document on February 13, 2019, inviting public comments up until March 6, 2019, and holding a conference where industry experts presented key issues on March 13 and 14, 2019. ... - Continue reading

The latest APA and MAP figures in Europe: what are the implications for multinational group taxpayers?

Statistics published earlier this week by the European Commission on member state advance pricing agreement (APA) and mutual agreement procedure (MAP) programs suggest that the OECD/G20 base erosion profit shifting (BEPS) project has increased the scope for differences of opinion between tax authorities of different countries. ... - Continue reading

Taxpayers given six months to challenge Denmark transfer pricing assessments based on insufficient documentation

A Danish tax administration decree, published 12 July in response to the Supreme Court’s decision in the Microsoft case, establishes a new practice for determining whether transfer pricing documentation must be available at the time the taxpayer is required to file its tax return. ... - Continue reading

Nigeria: Reviewing The Implications Of The Revised Transfer Pricing Regulations On Intangibles For Businesses

Intangibles are key sources of differentiation for businesses and typically, they help drive revenue, manage cost or both. As a result, many businesses make significant investments in developing, enhancing, maintaining and protecting unique and valuable intangibles to help drive their businesses. ... - Continue reading

Netherlands draft law requires disclosure of cross-border transactions to tax authorities

On July 12 the Netherlands government published a legislative proposal implementing the EU mandatory disclosure directive. This follows an internet consultation on a draft legislative proposal which ran from December 19, 2018 — February 1, 2019. ... - Continue reading

Transfer (mis)pricing

TRANSFER pricing — the pricing of commodities traded between or within multinational enterprises — is a legal practice and a key feature of cross-border and intra-firm transactions. The United Nations prefers to use the broader phrase ‘trade pricing’ in addressing this practice and defines it as a ‘normal incident of… – Continue reading