This is a short series of blogs on transfer pricing documentation: what I have seen over the years, how it does (not) align with OECD documentation requirements, and thoughts on possible improvements. I focus on practicalities. Why do we need TP documentation? One answer is because many countries’ laws require it. More interesting is the…

In a double take two-to-one decision because of a withdrawn decision due to the death of a judge, a Ninth Circuit panel in Altera reversed a unanimous en banc decision of the Tax Court that the qualified cost sharing arrangements (QCSA) regulations[1] were invalid under the Administrative Procedure Act.[2]  The renown Professor Calvin Johnson (Texas) and I shared comments on this case. Professor Johnson’s…

Corresponding adjustments and the MAP process When the price charged for goods or services sold between related parties is not in accordance with the arm’s length principle, Article 9(1) of the OECD Model authorizes the tax authorities of a State to make primary adjustments to the transfer price. This may trigger economic double taxation as…

We are glad to announce that the editorial team of the Kluwer Tax Law Blog has been strengthened with the appointment of Dr. Vikram Chand (Tax Policy Center, University of Lausanne, Switzerland) as the Managing Editor of the Blog. Dr. Chand currently has a strong interest in International Tax Policy, Transfer Pricing, Tax Treaty and…

1. Purpose of the blog Intra-group guarantees are usually used by companies within the same multinational enterprise to obtain beneficial conditions for funding arrangements. For instance, lower interest rates due to the decreased level of the credit risk assumed by the lender (such as a bank) or/and extended borrowing capacity. In this blog, we will…

Transfer pricing cases in India are estimated to account for more than half of the world’s transfer pricing disputes. Prolonged transfer pricing litigation due to overburdened courts and tribunals is a sad reality for many companies doing business in India. The consequence is that a cloud of uncertainty constantly hangs over cross-border, intra-group transactions routinely…

If the BEPS Project is considered formally concluded with the signature of the Multilateral Instrument, the war against base erosion and aggressive tax planning is still ongoing, with many battles remaining to be won. In this context, each and every transaction that can potentially serve aggressive tax planning is key target for policy-makers at the…

It is common to face resistance in MAP application, which is essentially based on misconception of Double Taxation Conventions (DTCs). As Article 9(1) establishes the arm’s length standard, which presents a range of possible prices, that misunderstanding may imply more economic double taxation. Given the Brazilian position on recent transfer pricing changes, these problems become…

Introduction Recently captive insurance arrangements have been scrutinized all over the world by tax authorities as they are believed to be vehicles that encourage profit shifting. The OECD, in the BEPS Action Plan, had considered captive insurance arrangements as a major area of concern. In fact, in the recently released 2018 OECD discussion draft on…

The update on tax certainty IMF/OECD Report for the G20 Finance Ministers and Central Bank Governors   published on 22 July 2018 may not have been everyone’s summer holiday reading. This report follows on from the 2017 IMF/OECD Report for the G20 Finance Ministers in March 2017. It should certainly give pause for thought. The “tax…

Introduction One of the advantages multinational groups enjoy over standalone companies is that their members have access to each other’s resources (such as, e.g., funding). In particular, less capable entities can boost their credibility if a related entity provides them with a performance guarantee, i.e., pledges to fulfill their contractual obligations in case they fail…

Introduction One of the most controversial topics of transfer pricing, in today’s multinational world, is the pricing of intercompany financial transactions. The 2017 OECD transfer pricing guidelines (TPG) lack clear rules specifically tailored to financial transactions, which can lead to a higher risk of divergent treatment of these transaction between tax administrations and taxpayers and…

Following up on Jonathan Schwarz’s latest blog contributing to the debate on taxation and value creation, I wanted to attempt adding some further critical points. The OECD’s stated goal of the second pillar (“Substance”) of its BEPS action plan is to align taxation with value creation. It has already been observed that this is a…

“Those who cannot remember the past are condemned to repeat it” George Santayana, The Life of Reason: Reason in Common Sense (1905). A seminar was held in Rotterdam on 18 May 2018 on “value creation” in the new tax universe to celebrate the 80th anniversary of the International Fiscal Association. An erudite panel, comprising Prof…