The OECD recognizes five transfer pricing methods for pricing intercompany transactions: CUP, RPM, CPM, TNMM, and PSM. A sixth method – not formally part of the OECD framework – applies to commodity transactions in several jurisdictions. Choosing correctly, and documenting that choice, is critical for any multinational group. How to Select a Transfer Pricing Method
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 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
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
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
It depends. Some countries ask for the local file preparation if there are transactions, no matter the value of them, some ask only if the transaction or entity exceeds a set threshold. To understand if you need to have a local file documentation, you need to consider a few main aspects:
Global minimum tax is an OECD initiative introduced as a part of the BEPS program. The idea behind this initiative is to ensure that big multinational corporations are taxed at an effective tax rate of at least 15%. Most countries added this initiative to their local legislation. The entry into force date varies among the countries, for example, the EU has implemented the regulation from January 2024.
Amount B is a part of Pillar One from the OECD BEPS program. The purpose of Amount B is to act as a safe harbor for baseline marketing and distribution services.
Currently, the future of Amount B isn’t clear. As its implementation is optional, some countries including Germany and the Netherlands, already announced that they aren’t going to implement it.
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