General Archives - Page 8 of 49 - Academy of Tax Law

PepsiCo v Australia: Implications for Royalty Withholding Tax and Diverted Profits Tax

Australia, Dispute Resolution, Tax Dispute Resolution, TP Case Summaries, Transfer Pricing / Dr Daniel N Erasmus

The Federal Court of Australia’s judgment in PepsiCo, Inc v Commissioner of Taxation provides critical insights into the characterization of payments under intercompany agreementsIntercompany Agreements (ICAs) are legally binding contracts between two or more entities within the same corporate group. These agreements outline the terms and conditions of transactions such as the sale of goods, provision of services, use of intellectual property, or intercompany financing. ICAs are crucial for managing transfer pricing compliance, mitigating tax risk, and demonstrating that intercompany transactions are conducted... More and the application of tax lawsTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public... More.

PepsiCo v Australia: Implications for Royalty Withholding Tax and Diverted Profits Tax Read More »

Keysight Technologies v. Malaysia: Implications for Transfer Pricing and Tax Compliance

International, International Tax, Malaysia, Tax Dispute Resolution, TP Case Summaries / Dr Daniel N Erasmus

The Keysight Technologies Malaysia case underscores the complexities of transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... More and tax complianceTax Compliance refers to the adherence of individuals and businesses to the tax laws and regulations of a specific jurisdiction. It encompasses the timely and accurate filing of tax returns, the payment of tax liabilities, and ensuring that all tax-related obligations are met as stipulated by legislation. Compliance involves more than just submitting tax forms; it includes maintaining accurate financial... More. By understanding the court’s findings and implementing robust tax risk managementTax risk management is a structured process used by organizations, particularly multinational enterprises (MNEs), to identify, assess, and mitigate potential risks that arise in relation to tax compliance, reporting, and planning. It plays a crucial role in ensuring that a company’s tax obligations are managed in a way that minimizes risk exposure while maximizing efficiency and strategic value. More strategies, companies can better navigate similar disputes and ensure compliance with tax regulationsTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public... More.

Keysight Technologies v. Malaysia: Implications for Transfer Pricing and Tax Compliance Read More »

Understanding Non-Recognition in Transfer Pricing

Denmark, International, International Tax, Luxembourg, Malaysia, Tax Dispute Resolution, Transfer Pricing / Dr Daniel N Erasmus

Explore non-recognition in transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... More through landmark cases from Malaysia, Luxembourg, and Denmark. Expert analysis by Prof. Dr. Daniel N. Erasmus.

Understanding Non-Recognition in Transfer Pricing Read More »

Malaysia Transfer Pricing Case: Watsons Personal Care Stores vs Tax Authorities

Asia, International, International Tax, Malaysia, Tax Dispute Resolution, TP Case Summaries / Dr Daniel N Erasmus

Summary of Malaysian transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... More case of Watsons Personal Care Stores vs tax authorities, its implications for multinationals, and key takeaways.

Malaysia Transfer Pricing Case: Watsons Personal Care Stores vs Tax Authorities Read More »

Understanding the Profit Split Method (PSM) in Transfer Pricing

Dispute Resolution / Dr Daniel N Erasmus

The Profit Split Method in Transfer Pricing is a crucial approach used to ensure that transactions between related companies are conducted at arm’s length, meaning at fair market value. This method is particularly useful in scenarios where transactions are highly integrated and cannot be evaluated separately.

Understanding the Profit Split Method (PSM) in Transfer Pricing Read More »

Understanding the Transactional Net Margin Method (TNMM) in Transfer Pricing

International, International Tax, Tax Dispute Resolution, Transfer Pricing, Transfer Pricing Methods / Dr Daniel N Erasmus

The Transactional Net Margin Method (TNMM)The Transactional Net Margin Method (TNMM) is one of the five primary transfer pricing methods recognised under the OECD Transfer Pricing Guidelines. TNMM is applied to evaluate whether the conditions of a controlled transaction between associated enterprises are at arm’s length. Unlike traditional transaction methods, which directly compare prices or gross margins, TNMM compares the net profit margin relative to... More is a pivotal tool in transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... More, used to ensure that transactions between associated enterprises are conducted at arm’s length. This method compares the net profit margin of a taxpayer from a controlled transaction with that of comparable uncontrolled transactions.

Understanding the Transactional Net Margin Method (TNMM) in Transfer Pricing Read More »

The Cost Plus Method in Transfer Pricing

International, International Tax, Tax Dispute Resolution, Transfer Pricing, Transfer Pricing Methods / Dr Daniel N Erasmus

The Cost Plus Method is a widely used approach in transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... More for determining arm’s length prices between related entities. This method is particularly useful for manufacturers, service providers, and other businesses that add value to goods or services before transferring them to related parties.

The Cost Plus Method in Transfer Pricing Read More »

Understanding the Comparable Uncontrolled Price (CUP) Method in Transfer Pricing

International, International Tax, Tax Dispute Resolution, Transfer Pricing, Transfer Pricing Methods / Dr Daniel N Erasmus

The Comparable Uncontrolled Price (CUP) MethodThe Comparable Uncontrolled Price (CUP) Method is a transfer pricing approach that assesses whether the price charged in an intercompany transaction between related entities is consistent with the arm’s length principle. The arm’s length principle, a fundamental concept in transfer pricing, requires that the conditions of a transaction between associated enterprises be equivalent to those which would have been agreed... More is one of the primary transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... More methods used to determine arm’s length prices for transactions between related entities.

Understanding the Comparable Uncontrolled Price (CUP) Method in Transfer Pricing Read More »

Danish Supreme Court Upholds Transfer Pricing Adjustment in Maersk Oil Case

Denmark, Dispute Resolution, International, International Tax, TP Case Summaries / Dr Daniel N Erasmus

Summary of the Danish Supreme Court’s landmark ruling on transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... More in the Maersk Oil case, with implications for multinationals and tax authorities worldwide.

Danish Supreme Court Upholds Transfer Pricing Adjustment in Maersk Oil Case Read More »

Understanding the Resale Price Method in Transfer Pricing

International, International Tax, Tax Dispute Resolution, Transfer Pricing, Transfer Pricing Methods / Dr Daniel N Erasmus

The Resale Price Method in Transfer Pricing is a fundamental approach used by multinational enterprisesWhat are Multinational Enterprises (MNEs)? Multinational Enterprises, commonly referred to as MNEs, are corporations that operate in multiple countries through various subsidiaries, branches, or affiliates. These entities maintain a central management structure while leveraging diverse resources, labour markets, and customer bases across borders. The fundamental aspect that distinguishes MNEs from other corporate forms is their cross-border activity, which can include... More (MNEsWhat are Multinational Enterprises (MNEs)? Multinational Enterprises, commonly referred to as MNEs, are corporations that operate in multiple countries through various subsidiaries, branches, or affiliates. These entities maintain a central management structure while leveraging diverse resources, labour markets, and customer bases across borders. The fundamental aspect that distinguishes MNEs from other corporate forms is their cross-border activity, which can include... More) to ensure compliance with international tax regulationsTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public... More.

Understanding the Resale Price Method in Transfer Pricing Read More »