Transfer Pricing Archives - Page 14 of 16

3M Company v Commissioner of Internal Revenue: U.S. Transfer Pricing and Foreign Legal Restrictions

FP News, Postgraduate Programmes in International Tax, Postgraduate Programmes in Transfer Pricing, Tax Dispute Resolution, TP Case Summaries, Transfer Pricing, United States / Dr Daniel N Erasmus

The dispute focused on the income taxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable... More treatment of intellectual propertyIntellectual Property (IP) refers to creations of the mind, including inventions, literary and artistic works, symbols, names, images, and designs used in commerce. It grants creators exclusive legal rights to use and exploit their work, ensuring protection against unauthorised use or reproduction. These rights are critical in fostering innovation and creativity while providing economic value to individuals and organisations. IP... More (IPIntellectual Property (IP) refers to creations of the mind, including inventions, literary and artistic works, symbols, names, images, and designs used in commerce. It grants creators exclusive legal rights to use and exploit their work, ensuring protection against unauthorised use or reproduction. These rights are critical in fostering innovation and creativity while providing economic value to individuals and organisations. IP... More) transactions between 3M’s U.S. subsidiaries and its Brazilian subsidiary, 3M do Brasil Ltda (3M Brazil), for the tax year 2006.

3M Company v Commissioner of Internal Revenue: U.S. Transfer Pricing and Foreign Legal Restrictions Read More »

Nokia vs. India: Permanent Establishment and Profit Attribution Dispute

FP News, India, International, International Tax, Permanent Establishment, Postgraduate Programmes in International Tax, Postgraduate Programmes in Transfer Pricing, Tax Dispute Resolution, TP Case Summaries, Transfer Pricing / Dr Daniel N Erasmus

The case revolved around whether Nokia Solutions and Networks Oy had a Permanent Establishment (PE) in India, and whether profits could be attributed to that PE under the India-Finland Double TaxationDouble Taxation occurs when the same income or financial transaction is taxed twice, typically in different jurisdictions. It can arise in two primary contexts: economic double taxation, where the same income is taxed twice in the hands of different taxpayers, and juridical double taxation, where the same taxpayer is taxed on the same income in more than one country. Double... More Avoidance Agreement (DTAA).

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Fiat Chrysler Finance Europe and Ireland v Luxembourg: State Aid, Transfer Pricing, and the Arm’s Length Principle

Arms Length Principle, EU, FP News, International, Luxembourg, Postgraduate Programmes in Transfer Pricing, Tax Dispute Resolution, TP Case Summaries / ATL-Editor

The case involves two appeals by Fiat Chrysler Finance Europe (formerly Fiat Finance and Trade Ltd) and Ireland, challenging the General Court’s decision to uphold a European Commission ruling that a tax rulingA tax ruling is a formal decision provided by a tax authority, clarifying how specific tax laws and regulations apply to an individual taxpayer or a corporate entity in particular circumstances. Often sought before a significant financial transaction or investment, tax rulings offer legal certainty by outlining the tax implications and obligations in advance. Such rulings are pivotal for multinational... More granted by Luxembourg to Fiat Chrysler Finance Europe constituted unlawful state aidState Aid refers to financial assistance provided by public bodies, typically governments, which can selectively benefit certain businesses or industries. This concept is critical in European Union (EU) law, where such support can distort competition and trade within the single market. State Aid, regulated under EU law, aims to ensure fair competition and prevent Member States from favouring local businesses... More.

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Eaton Corporation vs. IRS: Transfer Pricing Dispute

Dispute Resolution, International, International Tax, Tax Dispute Resolution, TP Case Summaries, Transfer Pricing, United States / Dr Daniel N Erasmus

Eaton Corporation, a global manufacturer of electrical and industrial products, faced significant tax disputesTax Disputes arise when there is a disagreement between taxpayers and tax authorities regarding the interpretation or application of tax laws. These disputes may concern various issues such as the accuracy of a tax return, the eligibility for tax deductions or credits, the correct amount of tax liability, or transfer pricing adjustments. Tax disputes can lead to lengthy legal proceedings... More with the IRS regarding its 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 practices. The disputes centered around the company’s Advance Pricing Agreements (APAs)Advance Pricing Agreements (APAs) have emerged as a critical tool for managing transfer pricing challenges. APAs are formal agreements between a taxpayer—often a multinational enterprise (MNE)—and one or more tax authorities that pre-determine the appropriate transfer pricing methodology for specified intercompany transactions over a set period, typically up to five years, with the possibility of renewal. The primary purpose of... More with the IRS, which were intended to establish 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 methodologies for transactions between Eaton and its subsidiaries. The APAsAdvance Pricing Agreements (APAs) have emerged as a critical tool for managing transfer pricing challenges. APAs are formal agreements between a taxpayer—often a multinational enterprise (MNE)—and one or more tax authorities that pre-determine the appropriate transfer pricing methodology for specified intercompany transactions over a set period, typically up to five years, with the possibility of renewal. The primary purpose of... More were canceled by the IRS, leading to a tax court case in 2017 and an appeal in 2022.

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Medtronic vs Commissioner of Inland Revenue

International, Postgraduate Programmes in Transfer Pricing, Tax Dispute Resolution, TP Case Summaries, Transfer Pricing, United States / ATL-Editor

The case of Medtronic, Inc. vs. Commissioner of Internal Revenue revolves around the complex issue 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, particularly concerning the appropriate method to determine the arm’s length royalty rates for the use of intellectual propertyIntellectual Property (IP) refers to creations of the mind, including inventions, literary and artistic works, symbols, names, images, and designs used in commerce. It grants creators exclusive legal rights to use and exploit their work, ensuring protection against unauthorised use or reproduction. These rights are critical in fostering innovation and creativity while providing economic value to individuals and organisations. IP... More between Medtronic US and its Puerto Rican subsidiary, MPROC.

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Ferragamo France Transfer Pricing Case: Key Lessons for Luxury Brands

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

The Ferragamo France 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 offers valuable insights for luxury goods companies. This landmark ruling highlights 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 in the high-end retail sector.

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UPS Asia Group Pte. Ltd. Case: Transfer Pricing and Permanent EstablishmentUPS Asia Group Pte. Ltd. Case:

Asia, India, International, International Tax, Permanent Establishment, Tax Dispute Resolution, TP Case Summaries, Transfer Pricing / Dr Daniel N Erasmus

The case of UPS Asia Group Pte. Ltd. vs. Asstt. Commissioner of Income TaxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable... More revolves around the interpretation of whether the applicant had a “Business Connection” in India and a “Permanent Establishment” (P.E.) under the India-Singapore Double TaxationDouble Taxation occurs when the same income or financial transaction is taxed twice, typically in different jurisdictions. It can arise in two primary contexts: economic double taxation, where the same income is taxed twice in the hands of different taxpayers, and juridical double taxation, where the same taxpayer is taxed on the same income in more than one country. Double... More Avoidance Agreement (DTAA). The Income TaxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable... More Appellate Tribunal (ITAT) ruled in favour of UPS Asia Group, stating that when the Indian Associated Enterprise (A.E.) is remunerated at arm’s length price, no further profit attribution is required, making the existence of a P.E. tax-neutral.

UPS Asia Group Pte. Ltd. Case: Transfer Pricing and Permanent EstablishmentUPS Asia Group Pte. Ltd. Case: Read More »

Transfer Pricing Dispute Between Australia and Glencore Investment Pty Ltd

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

Glencore Australia (CMPL) sold copper concentrate produced in Australia to its Swiss parent, Glencore International AG (GIAG).

The tax authorities found that the price paid by Glencore International AG to Glencore Australia for the copper concentrate in the relevant years, according to a price-sharing agreement, was less than the price that might reasonably be expected to have been paid in an arm’s length dealing between independent parties.

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Lexel AB v Sweden (Skatteverket): CJEU Ruling on Interest Deductions and Freedom of Establishment

Case Summaries, EU, FP News, International, International Tax, Postgraduate Programmes in International Tax, Postgraduate Programmes in Transfer Pricing, Sweden, Tax Dispute Resolution, TP Case Summaries, Transfer Pricing / Dr Daniel N Erasmus

In Lexel AB v Skatteverket (Case C‑484/19), the Court of Justice of the European Union (CJEU) ruled that Swedish tax legislationTax 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, which denied Lexel AB the right to deduct interest payments made to a group company located in another EU Member State (France), infringed upon the freedom of establishment protected under Article 49 TFEU.

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Coca-Cola vs. IRS: Landmark Transfer Pricing Dispute

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

The Coca-Cola 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 dispute is a landmark case between The Coca-Cola Company (TCCC) and the Internal Revenue ServiceTax authorities are fundamental institutions within government frameworks, overseeing tax assessment, collection, and administration. Their operations ensure that tax laws are enforced and public funds are collected efficiently. This article delves into tax authorities' purpose, responsibilities, and structure, offering insights into their essential role in supporting government functions and economic stability. What is a Tax Authority? A tax authority is... More (IRS). The case centers on the appropriate 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 method to allocate profits between Coca-Cola’s U.S. parent company and its foreign subsidiaries. The IRS argued that Coca-Cola’s existing 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 method resulted in underpayment of U.S. taxes, leading to a significant tax deficiency.

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