Getting Transfer Pricing Right in Cross-Border Operations
What Tax Authorities Focus On – and How Businesses Can Reduce Exposure When a business operates within a single jurisdiction, it is generally easier to determine where income is generated and where tax should be paid. In a global business environment, however, the position becomes considerably more complex. A group may have a parent company […]
Transfer Pricing for Intercompany Loans
Many corporates consider intercompany loans as sophisticated financial instruments that can be used to finance internal operations such as capital investments, acquisitions, and working capital or liquidity management. In practice, such loans are typically extended within corporate groups. Although intercompany loans may seem simplified and well-regulated in legal agreements, they often attract tax audits due […]
Brexit Impact on UK Transfer Pricing
Brexit had an impact on various aspects of the UK economy and UK entities. One important aspect that was impacted is transfer pricing. Post Brexit, companies in the UK, or those that have trade in the UK, have to take more taxation matters with regard to their intragroup pricing. Pre-Brexit Transfer Pricing Framework Before Brexit, […]
A Shift in the IRS’s Powers to Make Transfer Pricing Adjustments?
Insights from the 3M Court Ruling A recent ruling by the Eighth Circuit Court of Appeals in 3M Company v. Commissioner may significantly influence how the IRS applies Section 482 to cross‑border transfer pricing adjustments. The case was an appeal of the US Tax Court’s decision in an audit matter between the IRS and 3M Company […]
Economic Recession and Transfer Pricing: What to Consider
Recessions affect the economy in many ways, directly influencing consumer demand, global supply chains, and, notably, transfer pricing (TP) practices due to losses and changeable risk profiles, making it harder to apply standard pricing methods in cross-border transactions. When the market experiences a downturn, multinational enterprises (MNEs) often face challenges across their value chains, with […]
Key Issues and Opportunities in Transfer Pricing
Transfer pricing is an important global issue for companies. It applies to transactions between related companies in different countries. These related companies can be part of the same group or connected through direct or indirect control, influencing each other’s management or board of directors. This article will overview of the key issues and opportunities in […]
Arm’s Length Principle
The arm’s length principle is an important pillar of the transfer pricing regulations and policies, and it ensures that cross-border transactions between companies and their foreign-related parties are priced as if the transaction had been done at market value by independent parties. In this article, we will go over the main characteristics of the principle […]
Base Erosion and Profit Shifting Action Plan (BEPS)
Globalization has transformed worldwide human interactions, especially the way businesses approach their activities. Countries are now connected in new ways, and that connectivity has strengthened the economies of all the countries involved. With the increase in cross-border economic activity comes the need to set guidelines that will ensure an appropriate allocation of profits between the […]
Transfer Pricing – Another Victory for Tax Authority in Charging Tax on Royalties
Coca-Cola Case: The Central Company vs. The Tel Aviv District Tax Officer In recent years, rulings on transfer pricing have been accelerating globally as various tax authorities scrutinize the pricing policies of leading multinational groups. This trend is also present in Israel, highlighted by several judgments, including the Coca-Cola case. Recently, the Tel Aviv District […]
Transfer Pricing Explained
Over the past couple of years, transfer pricing (TP) has become a topic of discussion and interest in the global environment, even more than it was before. Big multinational (MNE) groups that we are all familiar with are handling the news with court cases regarding TP disputes. However, the relevance of TP doesn’t stop at […]