There has been a lot of discussion around the European Commission’s recent tax ruling in relation to Apple. Some saying the ruling will not set a precedent for future tax cases but excitingly Pascal Saint-Amans mentioned that as most of the company’s research and development took place in the US, it was clear profits should be associated with that jurisdiction. “There is no ambiguity here: the bulk of it belongs to the United States.” I have taken this information from The Irish Times and you can see the full article here. Maybe that is part of the reason why the tax ruling did not go into detail re transfer pricing. Surely the US will consider its options, and maybe one of them is to look at the overall arrangement from a US perspective to see if the profit should not be attributable to the US? Watch this space.
The article also states that Mr Saint-Amans questioned “Are we moving to a tax war between two blocs, Americans and Europeans, or are we still in an environment in which we can still build something? My view is that we must ensure we have cooperation among all the countries,” … “Clearly for the future we need to have a common set of rules…” I am sure Mr Saint-Amans was referring to the BEPS project.
Believe it or not, a major transfer pricing case will go to court next week. Billions of dollars will be at stake when lawyers for Cameco Corp. and the Canada Revenue Agency walk into a Toronto courtroom next week. Follow the link for a great summary on the case and the different opinions.
If you are still reading this, I guess you do find my blog informative, but also here is another great article by Lexology on “Getting to the hub of it: draft tax guidelines on marketing, procurement and other hubs”
Till next week, happy reading.