Weekly transfer pricing roundup – 17 June

The biggest news this week was the adoption of BEPS into the OECD Guidelines. But as every week there is always a lot happening, I hope the below helps you to stay up-to-date.

How Will Country-by-Country Reporting Assist in Transfer Pricing Risk Assessment? (BNA)

… Treasury and the IRS deemed it appropriate to use the model template [for CBCr] as a guide, given that the template was developed with the input of multiple stakeholders, including U.S. MNE groups, as a means to balance the benefits to tax administrations in collecting the information about an MNE group’s global operations as compared to compliance costs and burdens imposed on MNE groups…

Medtronic Wins Battle Over $1.3B Tax Bill (CFO)

A U.S. Tax Court judge has ruled that the Internal Revenue Service improperly assessed Medtronic a $1.3 billion tax deficiency, finding its allocation of profits between the medical device maker’s operations in the U.S. and Puerto Rico was unreasonable.

In a case that focuses on Medtronic’s transfer pricing — the royalty rates its Puerto Rican subsidiary paid to use its technology — Judge Kathleen Kerrigan also rejected Medtronic’s rates. But the company said her view was closer to its position than that of the IRS…

NZ should be net beneficiary of global clampdown on tax avoidance, Woodhouse says (NBR)

New Zealand should reap more gains than losses in a worldwide clampdown on multinational firms using complicated structures to avoid paying tax, Revenue Minister Michael Woodhouse says…

OECD Council approves incorporation of BEPS amendments into the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD)

15/06/2016 – On 23 May 2016, the OECD Council approved the amendments to the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations(“Transfer Pricing Guidelines”), as set out in the 2015 BEPS Report on Actions 8-10 “Aligning Transfer Pricing Outcomes with Value Creation” and the 2015 BEPS Report on Action 13 “Transfer Pricing Documentation and Country-by-Country Reporting“. These amendments provide further clarity and legal certainty about the status of the BEPS changes to the Transfer Pricing Guidelines, which were endorsed by the Council on 1 October 2015, by the G20 Finance Ministers on 8 October 2015, and by the G20 Leaders on 15-16 November 2015…

Singapore joins OECD fight against tax avoidance (Today)

SINGAPORE — The Republic has committed to the Organisation for Economic Cooperation and Development’s (OECD) global initiative to curb tax avoidance, and will require large companies based here to report their income, economic activity and taxes paid in every jurisdiction that they operate in…

Transfer pricing guidelines should be interpreted consistently with BEPS changes, OECD says (MNETax)

Countries that integrate the OECD transfer pricing guidelines into their national laws should now begin to apply not only the recently approved OECD/G20 base erosion profit shifting (BEPS) plan transfer pricing changes, but should also interpret all chapters of the transfer pricing guidelines consistently with those changes, the OECD has advised.

In a June 15 statement, the OECD noted that the OECD Council on May 23 formally approved the BEPS plan amendments. As a result, the transfer pricing work under BEPS actions 8–10 and 13 became applicable in countries that adopt those guidelines into their domestic laws.

It will take some time though, the OECD said, to conform the rest of the transfer pricing guidelines with the new BEPS changes…

What are your thoughts?

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