Welcome to your latest roundup. I am thinking about the next post outside of the transfer pricing roundup series and I was hoping you could let me know a topic I should consider? What issues have you dealt with lately to which you would like an outside opinion or is there a topic that may not be clear to you? Please let me know either via the comments below or via direct mail/message. Thanks to those of you who have been sending me queries, I loved the challenge.
Novel EC ruling won’t scare away international businesses but has reignited debate on how to tax them (Business Irish)
“The European Commission’s conclusion that Ireland must recover unpaid tax from Apple – up to €13bn, plus interest – is the result of a political and economic battle between the world’s two largest trading blocs, with Ireland caught in the middle.
The decision has been described by Apple’s CEO Tim Cook as an effort to rewrite Irish tax law and upend the international tax system. The Irish Revenue Commissioners have said the decision defies common sense. However, at its heart, it is ultimately a legal question as to whether the Commission is correct when it makes findings of this nature…”
“The European Commission decision requiring Ireland to retroactively recoup $14.5 billion in unpaid taxes from Apple Inc. suggests the commission didn’t want to become embroiled in a spat over the international arm’s-length standard.
The commission’s Aug. 31 four-page summary of its final decision didn’t delve into the details of profit margins between related-parties covered in the two Irish advance pricing agreements like it did in its 2014 preliminary findings. Instead, it focused on the larger picture and found the whole setup a sham, saying the overall attribution of profits to one of the entities covered in the APAs—Apple Sales International (ASI), the group’s international sales arm—didn’t correspond to economic reality.
In doing so, the decision avoids a potential legal battle over whether the commission in its state aid cases is effectively creating a second arm’s-length standard, as argued by the U.S. Treasury…”
OECD releases comments on draft tax guidance relating to profit splits, permanent establishment (MNE Tax)
“The OECD today released 107 comment letters, mostly from business representatives, that respond to two OECD discussion drafts providing for common tax rules to be used to allocate multinational corporation profits among the countries in which they operate.
Fifty-five comment letters relate to the OECD’s proposed revisions to its transfer pricing guidelines concerning profit splits. Fifty-two comment letters concern draft guidance dealing with the attribution of profits to permanent establishments (PEs).
Both drafts were made public last July and address unfinished work associated with the OECD/G20 base erosion profit shifting (BEPS) plan, a multi-country effort that seeks to curtail multinational corporation tax avoidance.
The vast majority of comments released were submitted by business representatives…”