An economic discipline applied to taxation in to try and prevent companies from shifting income to low tax or no tax jurisdictions.
On 24 August 2016, the US Treasury Department issued a White Paper on “The European Commission’s Recent State Aid Investigations of Transfer Pricing Rules” (the “White Paper”), denouncing the Commission’s “new approach” as “an unforeseeable departure from the status quo” whose retroactive application “would be inconsistent with EU legal principles” and “undermine the G20’s efforts…
Harmonisation of the efforts to discourage tax avoidance in the EU Recently, besides the objective of maintaining a balanced allocation1 (a reflection of the principle of territoriality), the imperative of restoring trust in the fairness of tax systems has been gaining terrain as a possible justification for restrictions of free movement rights2. The Member States…
The attribution of profits to a permanent establishment is already a complex issue with at least three separate regimes in the tax treaty context- the OECD Authorised Approach under the 2010 OECD version of Article 7 of the OECD Model, the AOA subject to limitations required by the pre-2010 version and that permitted by Article…
On June 27, 2016 the EU Commission published the long awaited Starbucks State Aid decision (see here). The EU Commission’s decision challenges the outcome of the Advanced Pricing Agreement (APA) between the Netherlands Tax Authority (Tax Authority) and Starbucks Manufacturing BV (SMBV), a wholly owned and controlled coffee roasting operation. Below is the Part I…
“Improper and plainly undermines legal certainty and the rule of law.” This is how four U.S. senators – including the Chairman and Ranking Member of the U.S. Senate Finance Committee – recently described the European Commission’s State aid investigation into tax rulings by Member States, including into Ireland’s tax treatment of Apple. Of course the…
The EU Commission and EU Parliament want to settle for nothing less than public country-by-country-reporting, in direct conflict with G20 BEPS adoption resolution. For many good reasons, business in Europe is opposed to such publication. I do not need to dwell on the arguments here. These are widely available. My interest has been piqued by…
On 6 June 2016, the European Commission finally released its decision in the McDonald’s State Aid case. After the clarifications recently provided on the Commission’s position concerning transfer pricing cases and the arm’s length principle (see especially its decision in the Belgian Excess Profits Exemption Scheme, §§ 145–150, clarifying the Commission’s reliance on an independent…
I want to talk about TP documentation. If what I say seems a little crazy, then at least of part of it is to be deliberately provocative. I attended a wonderful TP conference in London in March with many knowledgeable speakers, but one (shocking) question lingers in my mind. In a workshop, the workshop leader…
In highly dramatic fashion the French tax authorities and IT specialists raided Google’s headquarters and McDonalds. I don’t own Google stock. I’m not in favor of Google’s near monopoly on search (though it has accomplished this by offering a really great product and (free) work tools that make my life much easier). I don’t eat…
This is the first part of a series about numbers in transfer pricing. In this edition, I look at sticking the TP five methods on a typical profit and loss account (hereafter “P&L”). I find it curious that we do not see a lot more of this around, as I believe it is essential to…
Treasury recently released its 2015 Transfer Pricing Advance Pricing Agreements Report to Congress, the seventeenth report since the initial 1999 report. Each year, the Treasury APA Report describes the annual experience, structure, and activities of the APMA Program. Treasury also formally released the much discussed new audit/examination protocols that will become effective 1 May 2016. …
The OECD BEPS project was kicked off by the observation that the interaction of domestic tax systems sometimes leads to an overlap, resulting in double taxation as well as gaps, which result in an item of income not being taxed anywhere, thus resulting in so called “double non-taxation”. Co-operation among countries historically addressed double taxation…
(“Every in-house tax department should have their own IT/Financial systems capacity” – JHM, TP Minds London, 2015.) The unexpected benefit from country by reporting (“CbyC”) reporting is that tax departments may learn something about their own groups’ financial systems. What is there to learn? If you are in-house, answer these four questions: 1. Do you…
Since the press releases confirming negative State Aid decisions in the Starbucks and Fiat tax ruling cases late October, the EU tax law community is still eagerly awaiting the publication of the actual decisions (to be published here and here). Most likely, the decisions will hinge on the concrete transfer pricing calculations made (or accepted)…
