In a 207 page opinion the Tax Court ruled March 23, 2017 that the IRS’s adjustment with respect to Amazon.Inc’s transfer pricing buy-in payment for an intragroup cost sharing agreement (CSA) is arbitrary, capricious, and unreasonable.[1]   Another major blow for the IRS in a string of such losses starting with VERITAS[2] (2009), the 2010 Xilinx[3] about-face…

In quantum physics, nothing is certain, particles are not to be found at one point but within waves of probabilities and connected particles can mirror each other faster than the speed of light because there is no transfer of information. Agency PE’s threaten to become the quantum physics of taxation. Introduction But let us get…

If there was ever a need to demonstrate the need to improve international tax dispute resolution mechanisms, it was as a speaker at the TP Minds conference earlier this month. In the course of our panel discussion on dispute resolution post BEPS, I asked the audience of over 100 tax directors and managers of multinational…

Lower energy cost is a major factor for U.S. manufacturers … to be able to offer on par production costs to China, and 10 percent to 20 percent lower costs than European manufacture. I’ve been remiss in my blogging since the surprise victory of the presidential election.  It is not because I think the apocalypse…

On 16 February 2017 the Public Consultation on the proposed introduction of rules at EU level to disincentivize promotion of aggressive tax planning schemes was closed. The rules under consideration focus on a Mandatory Disclosure Regime (MDR) – referred to also as a Disclosure of Tax Avoidance Schemes (DOTAS) regime. Under such rules, tax advisers…

The Italian Supreme Court issued a landmark case (n. 27113 December 2016) setting out the principles to be taken into account when analyzing whether a company can be deemed the “beneficial owner” for the purpose of being entitled to double tax treaty benefits. In particular, the Italian Supreme Court examined whether a company resident for…

In March, 2015, in wrote in this same pages: “The BEPS Project is subject to internal (inherent) risks (tight schedule, quality of outcomes, jurisdictional overlapping) as well as external risks (potential breach of the Nations’ compact behind a common goal due to competing interests, and misaligned, premature and unilateral actions by States) which might conspire…

Tax treaty negotiators in 100 countries will be tied up over the next few months with the challenge to evaluate their positions on the BEPS Multilateral Convention (BEPS Convention) with a view to participation in the signing ceremony scheduled for 7 June 2017 in Paris. The many options offered by the BEPS Convention make it…

On February 1, 2017, India’s Finance Minister, Arun Jaitley, presented the country’s 2017-18 Budget, which contains several tax proposals in the area of international tax law, including the introduction of a new provision to provide for transfer pricing secondary adjustments and new thin capitalization rules. The Budget also contains much-needed clarity on the tax treatment…

Much changed in the world of taxation the last couple of years. The OECD started and finished the BEPS (Base Erosion and Profit shifting) project. The objective of BEPS was to develop rules that would prohibit multinational enterprises to implement tax avoiding structures or tax evasive set-ups. The EU investigated the tax structures of Apple,…

A recent ruling in GE Money Financial Services Pvt. Ltd. v. DCIT, the Income Tax Appellate Tribunal (ITAT) has further contributed to the uncertainties in Transfer Pricing in India. The ruling is a drastic departure from international transfer pricing norms especially the OECD Transfer Pricing Guidelines and UN Transfer Pricing Manual. Brief Facts GE Money…

Italy has embarked upon the challenging task of redesigning its tax system.  The Act[1] of late November 2016 (hereinafter, “Act”) constitutes a best-practices example, or at least for our Country. The above Act illustrates the national fiscal policy for the coming 3-year period, i.e., for 2017 – 2019, specifying the primary objectives and the guidelines…

India has entered into more than 100 double tax avoidance agreements with foreign nations. Almost all these tax treaties contain an article on Mutual Agreement Procedure (MAP) setting out how India and its treaty partners would resolve, at the instance of the taxpayer, disputes that lead to “taxation not in accordance with the treaty.” International…

On 24 November 2016, the OECD released the Multilateral Convention designed for the implementation of tax treaty measures related to the Base Erosion and Profit Shifting (“BEPS”) Project. The Multilateral Convention is backed up by an Explanatory Statement, which clarifies the approach adopted to modify the provisions of existing bilateral tax treaties. The Multilateral Convention…