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Transfer pricing rules have been part of UK tax legislation since 1997, and most multinationals operating in the UK are required to self-assess compliance with the arm's length principle when completing their tax returns. The UK tax authorities have long seen transfer pricing as a key issue. In...
The OECD's Base Erosion and Profit Shifting ("BEPS") initiatives have already altered the international tax landscape dramatically, although the dust is far from settled. Tax planning structures that multinational firms have widely employed may no longer be viable. Firm-specific tax rulings do not...
30/09/2015 Elizabeth King, Beecher Consulting, US
2015 is shaping up to become one of the largest years on record for M&A activity.1 For many companies involved in such transactions, an inevitable outcome will be the preparation of purchase price allocation analyses (PPAs) in order to satisfy financial reporting requirements. At the same time,...
30/09/2015 Michael Heimert, Duff & Phelps, US
In Altera Corp. v. Commissioner, the U.S. Tax Court (USTC) held that a Treasury regulation requiring participants in a qualified cost sharing arrangement (QCSA) to share stock-based compensation costs (SBC) is invalid.
The Altera decision was the outcome of cross-motions for partial summary judgment...
30/09/2015 Philippe G Penelle PhD, Deloitte, US
Canada's federal tax authority, the Canada Revenue Agency (CRA) is a mature and sophisticated tax authority by any measurable global standard. With approximately 40,000 employees, the CRA is responsible for the administration of tax laws in Canada for most of Canada's 10 provinces and three...
30/09/2015 Markus Navikenas MA, MBA, Deloitte, Canada Keith Falkenberg, Deloitte, Canada
Mexico's president on 8 September sent to Congress an economic package that includes proposed amendments to the Income Tax Law (ITL) and the Federal Fiscal Code (FFC) with transfer pricing implications. According to the legislation's explanatory memorandum, the goal is to incorporate the BEPS agenda...
30/09/2015 Simón Somohano, Deloitte, Mexico Jorge Mesta Espinosa, Deloitte, Mexico
For the last years, Brazilian taxpayers have been experiencing difficulties concerning the transfer pricing compliance, either because of the recent amendments to the legislation – some of them "inspired" by the tax transparency of the OECD's project on base erosion and profit shifting (the...
Recent developments in UK transfer pricing have included additional tax authority resources for a new drive against tax avoidance by multinationals, the introduction of the requirement for detailed reporting of global profits and activities by large UK-headquartered companies, more risk of transfer...
30/09/2015 Danny Beeton, Duff & Phelps, United Kingdom
At a time when transfer pricing is at the forefront of the international tax debate, the Dutch Ministry of Finance published a new transfer pricing decree (IFZ 2013/184M). The decree of November 14, 2013, replaced two previous decrees on the application of the arm's length principle. Furthermore, in...
30/09/2015 Thijs Heijenrath, Deloitte, Netherlands Bert van der Klok, Deloitte, Netherlands
In recent years, transfer pricing has been very high on the agenda of both taxpayers and the tax administration in Italy, with transfer pricing audits and challenges becoming increasingly common. The OECD project on Base Erosion and Profit Shifting (BEPS) has...
30/09/2015 Gianni de Robertis, KPMG, Tax & Legal, Italy
Global measures in response to the OECD's BEPS initiative also have had an impact on the regulatory framework in Germany. The German government supports the BEPS initiative, in particular Action 7 (Prevent the artificial avoidance of PE status), Action 8...
30/09/2015 Jobst Wilmanns, Deloitte, Germany
The operative, but not exclusive, article of law in France that currently governs transfer pricing is Article 57 of the French Tax Code ("FTC"), entitling French Tax Authorities ("FTA") to reassess related transactions whose conditions deviate from what independent parties would have agreed under...
30/09/2015 Jan Martens, EY, France
In the past couple of years, transfer pricing has been pointed to by media and politicians as being at the heart of international tax avoidance. The arm's length principle has been blamed for being flawed and outdated and for arguably facilitating the concentration of profits in low-taxed entities...
30/09/2015 Caroline Silberztein, Baker McKenzie, France
The global tax environment is rapidly changing. Tax strategies, which have been legal and common for many years, are increasingly regarded as unacceptable. The public perception that corporates artificially shift earnings to low tax jurisdictions and default on their "social contract" has...
One of the main topics Japanese taxpayers are currently interested in is the Organization for Economic Cooperation and Development's (OECD's) base erosion and profit shifting (BEPS) initiative. Broadly speaking, the BEPS initiative looks at whether existing international tax principles and rules...
30/09/2015 Gary M Thomas, Deloitte Tohmatsu Tax Co, Japan Timothy O'brien, Deloitte, Japan Luke Tanner, Deloitte, Japan
India's new government has embarked on several unprecedented initiatives to regain investors' confidence by taking bold steps. Recent examples include the decision not to challenge the Bombay High Court's ruling in the Vodafone case at the Supreme Court, the quick response on MAT and FII, and the...
30/09/2015 Vishweshwar Mudigonda, Deloitte, India
China's State Administration of Taxation (SAT) has been encouraging taxpayers to use the profit split method for a long time. However, outside of advance pricing agreements (APAs), the profit split is not a practical transfer pricing method. Even in the case of APAs, the profit split is used in less...
30/09/2015 Eunice Kuo, Deloitte, China John Leightley, Deloitte, China
Recent international tax developments in Asia reflect the growing focus on transfer pricing, in tandem with global developments. This summary highlights recent key transfer pricing policy announcements in the region and discusses the potential local impact of country-by-country reporting (CBCR)...
30/09/2015 Luis Coronado, EY, Singapore
On July 19 2013, the Committee on Fiscal Affairs (CFA) of the OECD published its action plan to address base erosion and profit shifting (BEPS). The action plan follows from directives given to the CFA by the G20 group of countries to better address global corporate taxation and builds upon the...
28/04/2014 Michael F Patton, DLA Piper, US
The Organisation for Economic Co-operation and Development (OECD) and the governments of the major economies around the world have been concerned about the fiscal impact of continued global economic instability and decreasing corporate income taxes that are perceived to be caused, at least in part,...
01/09/2013 Rob O'Connor, Deloitte, Canada
The Dutch approach to the arm's length principle has always kept pace with the evolving international interpretation, and arguably in certain aspects has even been ahead of its time. The OECD guidance around alignment between the actual controlling of risks with the contractual division of risks, as...
01/09/2013 Danny Oosterhoff, EY, Netherlands
In 1995, when the Organization for Economic Cooperation and Development (OECD) issued the Transfer Pricing Guidelines, China was not at the table. At that time, China did not factor in the global calculus except as a cheap Asian export platform. Fast forward 18 years,...
01/09/2013 Glenn DeSouza, Dentons, China
The current global economic crisis and news reports regarding multinational corporations' business structures to avoid or minimize taxes have led to a sense of unfairness at the broader level of the public. The OECD's Base Erosion and Profit Shifting (BEPS) Action Plan, published July 19 2013, tries...
01/09/2013 Mudit Kapoor, Deloitte, Netherlands Joke Koning, Deloitte, Netherlands
It has been over 10 years since India formally introduced transfer pricing regulations. The last decade has seen a rapid expansion of multinational corporations (MNCs) into Asia to leverage the emerging Asian networks for low-tech, labor-intensive trade and production & services. China and India are...
01/09/2013 Samir Gandhi, Deloitte Touche Tohmatsu, India Shanto Ghosh, Deloitte, India
The United States has extensive statutory, regulatory, and administrative guidance governing the conduct of transfer pricing audits. Transfer pricing audits are part of the general overall audits of large corporate taxpayers, but because of their complexity and magnitude they may become the major...
01/09/2013 Keith Reams, Deloitte, US Cindy Hustad, Deloitte, US
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