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Topic: Transfer pricing

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	New transfer pricing documentation requirements and penalties.
		Upon audit, the IRS accepts all transfer prices as reasonable except for the transfer to Country D. For a transfer of this quantity to this location, the IRS determines the arm's-length range of prices is from $12.50 to $28.50.
		Since a specified transfer pricing method (comparable uncontrolled price) was used, the taxpayer is confident the price is appropriate and within the provisions of IRC Sec.
		Transfer prices may be set for managerial purposes so long as adjustments needed to comply with IRC Sec.
	www.nysscpa.org /cpajournal/old/17015440.htm (2777 words)

	Canadian Transfer Pricing Documentation
		In the absence of the transfer pricing documentation, the tax auditor is required to assess statutorily prescribed penalty in the amount of 10% of the net adjustment of the transfer price.
		Description of the data and methods considered and the analysis performed to determine the transfer prices or the allocations of profits or losses or contributions to costs, as the case may be, in respect of the transaction.
		If it is recognized that the transfer price recorded during the year for some or all transactions did not represent an arm's length price, it is possible to record a compensating year-end adjustment to the transfer price prior to filing T106s and tax returns.
	www.transferpricing.ca /docum.htm (4329 words)

	OECD Observer: Transfer pricing: Keeping it at arm’s length
		Transfer pricing can deprive governments of their fair share of taxes from global corporations and expose multinationals to possible double taxation.
		It is likely that the original transfer price set by the MNE was wrong because it left all the profit with the manufacturer, while the Dutch proposal erred on the other side by wanting to transfer all the profit to the distributor.
		But abuse of transfer pricing may be a particular problem for developing countries, as companies might take advantage of it to get round exchange controls and to repatriate profits in a tax free form.
	www.oecdobserver.org /news/fullstory.php/aid/670/Transfer_pricing:_Keeping_it_at_arm__8217;s_length.html (1310 words)

	Transfer pricing - IT Week (Site not responding. Last check: 2007-10-21)
		Transfer pricing has become not only a major tax planning opportunity for multinationals, but also an important consideration when streamlining and remodelling business structures.
		Transfer pricing, the accepted mechanism for allocating profits between subsidiaries for tax purposes, is an accepted part of compliance life.
		A traditional transfer pricing approach, cost plus, might be used where the centralised procurement is effectively just a managed service.
	www.itweek.co.uk /financial-director/features/2143363/transfer-pricing (2823 words)

	Ernst & Young - Financial Services - Transfer Pricing Survey 2005
		The research showed that the risk is truly global in scope, with 28 countries cited by the survey respondents as likely to challenge their transfer pricing arrangements during the next two years.
		At present, 52 per cent have global transfer pricing policy guidelines, but only 17 per cent prepare the documentation required by tax rules in a globally coordinated manner, and 56 per cent perform economic analysis to demonstrate to tax authorities that their pricing is consistent with the tax standards.
		Transfer pricing relates to the pricing of internal transactions between related companies or branches, and covers a wide range of issues – such as the provision of services, the cross-border use of information technology systems, or financial transactions involving more than one country.
	www.ey.com /GLOBAL/content.nsf/International/Financial_Services_-_Transfer_Pricing_Survey_2005 (937 words)

	Transfer Pricing
		Transfer pricing is widely accepted as one of the most significant tax issues facing multinational enterprises and revenue authorities.
		Whilst transfer pricing is often seen as a compliance issue, transfer pricing can also be used as a planning tool to create value for a multinational group.
		Transfer pricing planning is not restricted to large multinationals.
	www.pwcglobal.com /extweb/service.nsf/docid/036B829F73A37942852567C800367ED0 (225 words)

	AICPA Management Accounting
		While cost-plus prices have the appeal of simplicity and ease of calculation, be aware that cost-plus transfer prices can provide exactly the wrong incentive for the producing unit.
		The key is not simply to set individual transfer prices at the right level but to have a defensible system in place for setting transfer prices and to make sure that that system wins government approval in all tax jurisdictions.
		Transfer prices must reasonably reflect those differences, and when market conditions change significantly, the transfer prices must be revised.
	www.aicpa.org /pubs/jofa/jul98/carter.htm (2131 words)

	Transfer Pricing
		Section 482 of the Code authorizes the IRS to adjust the income, deductions,credits, or allowances of commonly controlled taxpayers to prevent evasion of taxes or to clearly reflect their income.
		The regulations under section 482 generally provide that prices charged by one affiliate to another, in an intercompany transaction involving the transfer of goods, services, or intangibles, yield results that are consistent with the results that would have been realized if uncontrolled taxpayers had engaged in the same transaction under the same circumstances.
		This document provides principles under which taxpayers can create uniform transfer pricing documentation (“PATA Documentation Package”) so that one set of documentation can meet their respective transfer pricing documentation provisions.
	www.irs.gov /businesses/international/article/0,,id=120220,00.html (155 words)

	Transfer Pricing
		This price (the transfer price) is used to place a value on the transaction between the two divisions.
		Negotiated transfer prices: The transfer price is reached by negotiation between the relevant division managers.
		The transfer pricing mechanism that an organization applies may have a critical impact on the organization's performance.
	www.bgu.ac.il /~ariehg/tpintro.htm (771 words)

	Transfer Pricing Regulations In India (Site not responding. Last check: 2007-10-21)
		Sub-section (2) provides that where more than one price may be determined by the most appropriate method, the arm’s length price shall be taken to be the arithmetical mean of such prices.
		The nature and terms (including prices) of international transactions entered into with each associated enterprise, details of property transferred or services provided and the quantum and the value of each such transaction or class of such transactions.
		A description of the methods considered for determining the arm’s length price in relation to each international transaction or class of transaction, the method selected as the most appropriate method alongwith explanations as to why such method was so selected, and how such method was applied in each case.
	www.indiainfoline.com /lega/tapr/trpr.html (3846 words)

	COMMUNITY ECONOMICS: Multinational Operations: Transfer Pricing and Taxation
		An easily-followed illustration shows how transfer pricing can be used by multinationals to maximise their profits by tax avoidance and by obtaining tax rebates.
		When one part of a multinational organisation in one country transfers (that is, sells) goods, services or know-how to another part in another country, the price charged for these goods or services is called 'transfer price'.
		The transfer price is arbitrary, depending as it does only on agreement between ourselves and the subsidiary, and thus on ourselves.
	www.solbaram.org /articles/clm503.html (2446 words)

	GTI.org - Transfer pricing
		Transfer pricing traditionally occurs where goods or services move between related parties cross-border.
		In some countries, transfer pricing rules are also applicable to intra-border transactions.
		Defence of transfer pricing disputes can take a long time to resolve and inevitably involves going back through old records.
	www.gti.org /services/tax/transfer.asp (313 words)

	Critical Concerns in Transfer Pricing and Practice — www.greenwood.com
		Its complexity is compounded by the impact of e-commerce, speeding the flow of goods and services; "intangible" assets, such as intellectual property, whose value is difficult to quantify; and the activites of policymakers around the world to update their tax laws and regulations, in efforts to close loopholes that have historically encouraged tax avoidance.
		In particular, he discusses methods for pricing transferred goods and services in the e-commerce era and analyzes the most recent regulation reforms in such countries as Germany, Mexico, Japan, Canada, the United Kingdom, the United States, and the Netherlands.
		Anticipating increased scrutiny of MNC transfer pricing practices from governments and other external stakeholders, Abdallah outlines a set of practical recommendations for creating a successful transfer pricing system that maximizes value for the company while remaining sensitive to local policies in all of the countries in which it operates.
	www.greenwood.com /books/BookDetail.asp?dept_id=1&sku=Q561 (303 words)

	Transfer Pricing (Site not responding. Last check: 2007-10-21)
		On that date, transfer pricing rules were extended to cover domestic transactions between related UK companies.
		During this period, however, large companies (under the new definition) are required to make adjustments to their tax returns for transfer pricing transactions not made on an arm's-length basis.
		Companies should analyse whether they could be exempt from it, the benefits and risk associated with their current transfer pricing strategy, and the level of documentation necessary to support it.
	www.rsmi.com /triweb/triweb.nsf/body/KTRS62MDY4 (423 words)

	Mitchel Zuniga & Smith Tax and Business Services - page one - International Tax, Transfer Pricing
		The increased instances of a transfer pricing audit and the addition of multiple reporting requirements leave the inexperienced practitioner and client at great risk.
		We'll conduct transfer pricing studies which are used to determine the client's compliance or exposure to Section 482, and make appropriate comments and recommendations.
		The transfer pricing study is also used when seeking an Advanced Pricing Agreement (APA) with the IRS or foreign governments.
	www.mitchelzuniga.com /pageone.html (834 words)

	CFO: Magazine for Senior Financial Executives: Separate but Unequal - transfer pricing
		Transfer prices, the charges recorded by a corporation when its units do business with each other, serve to establish the internal profit structure on which taxes are paid.
		In short, transfer prices, while essential for tax reporting, create major headaches for Flaxman when applied to management reporting at the HP Enterprise Computing organization.
		Lately, though, the authorities have been much more aware of how corporations manage their transfer prices, as governments have sought to increase the amount of income reported and taxed in their jurisdictions.
	www.findarticles.com /p/articles/mi_m3870/is_8_15/ai_55350838 (1358 words)

	EUROPA - Taxation and Customs Union / Transfer pricing forum
		There is convincing evidence that applying transfer prices for tax purposes is complicated and problematic in practice.
		In addition, the improvement of Member States' co-ordination in order to reduce compliance costs and lessen the uncertainty relating to transfer pricing are considered of major importance in the short term.
		Commission Communication (COM/2004/297 of 23/04/2004) on the work of the EU Joint Transfer Pricing Forum in the field of business taxation from October 2002 to December 2003 and on a proposal for a Code of Conduct for the effective implementation of the Arbitration Convention (90/436/EEC of 23 July 1990)
	europa.eu.int /comm/taxation_customs/taxation/company_tax/transfer_pricing/forum/index_en.htm (751 words)

	Tax Executive, The: Recent developments in Canadian transfer pricing
		Two concern transfer pricing-related penalties, and the associated notion of preparing contemporaneous documentation; and the third deals with taxpayer-initiated downward adjustments related to excessive inbound prices or insufficient outbound prices.
		Although there are several other factors that could be considered to be part of Canadian transfer price law and practice, the foregoing should serve to provide an adequate framework to consider the three recent developments in Canada.
		With effect in 1999, there is a transfer price related penalty, equal to 10 percent of the amount by which Canadian income has been understated because of transfer prices not conforming to the arm's-length principle.
	www.findarticles.com /p/articles/mi_m6552/is_3_55/ai_106097231 (1028 words)

	Transfer Pricing
		Transfer pricing is a term used to describe all aspects of intercompany pricing arrangements between related business entities, including transfers of intellectual property; transfers of tangible goods; services and loans and other financing transactions.
		You need to know whether your internal controls over transfer pricing are sufficient to satisfy a Section 404 end of year audit.
		At PricewaterhouseCoopers, we have a strong international network of dedicated transfer pricing specialists with advanced training in economics, accounting, law and project management, ready to work with you.
	www.pwcglobal.com /Extweb/service.nsf/docid/92E194F427FBD3E485256FBE0073DCBD (211 words)

	Transfer Pricing
		Transfer pricing has become the single most important tax issue facing global companies today.
		Domestic and international tax authorities have put transfer pricing at the top of their agendas: with more stringent audits, new rules, tax penalties, and documentation requirements, transfer pricing is about to get even more complex.
		Explore the challenges and opportunities that exist when bringing the transfer pricing function in-house, the implications of new proposed cost-sharing regulations, how Sarbanes-Oxley influences transfer pricing, and, of course, other significant hurdles in advance pricing agreements (APAs) that affect your financial results.
	www.infonexusa.com /usa/U033/overview.html (326 words)

	International Tax Review
		Insofar as the OECD's transfer pricing guidelines (Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, OECD, 1995) can be thought of as an expanded commentary on article 9 of the organization's model treaty, the Discussion Draft can be thought of as an expanded commentary on article 7.
		For asset management, the key function is risk management, perhaps best summarized as being a decision-making function, constantly assessing whether to keep a risk position open in the hope of favourable market movements, or to hedge that risk by means of derivatives, or to dispose of the asset altogether.
		The Discussion Draft suggests that an intraentity transfer of assets should only be recognized if the receiving PE performs risk-taking functions in respect of that asset.
	www.internationaltaxreview.com /?Page=17&ISS=13155&SID=488119 (2052 words)

	Financial Opinions & Advisory Services -Transfer Pricing
		Tax authorities, recognizing the potential for income shifting to lower tax jurisdictions, are becoming more vigilant in enforcing transfer pricing regulations in today’s globally-connected economy.
		Our senior transfer pricing and valuation practitioners combine analytical depth with a clear understanding of industry issues and possess significant experience in negotiating with regulatory agencies and providing expert testimony.
		We were asked to develop an arm’s length royalty schedule for the transferred technology and to also assist with the company’s APA filing and IRS negotiations.
	www.hlhz.com /main.asp?p=CORP_FINADV_TransferPricing (606 words)

	SSRN-Strategic Transfer Pricing, Absorption Costing and Vertical Integration by Robert Göx
		When transfer prices are observable, both firms' headquarters will exclude their marketing division from the external input market and charge a transfer price above the market price of the intermediate product to induce their marketing managers to behave as softer competitors on the final product market.
		When transfer prices are not observable, strategic transfer pricing is not an equilibrium, and the optimal transfer price equals the market price of the intermediate product.
		Moreover, when the firms' products are close substitutes, the strategic benefits of full cost based transfer pricing can provide incentives to maintain a production department that would not be able to survive as a separate firm in the long run.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=98661 (332 words)

	Transfer Pricing Examinations (2/96)
		Because of this, Service litigators may be reluctant to litigate transfer pricing issues when the litigator cannot point to facts clearly justifying the Service in bringing the issue to court.
		Thus, in the transfer pricing context, communications to accountants and economists retained by an attorney as experts to assist the attorney in providing legal advice are subject to the privilege.
		In the transfer pricing context, the privilege may be of most significance as to any preliminary analysis and associated materials developed by an expert assisting counsel in rendering legal advice concerning areas of possible exposure and the advisability of adopting a particular transfer pricing methodology.
	www.pmstax.com /intl/bull9602.shtml (7889 words)

	Transfer Pricing - Deloitte & Touche S.R.L.
		The staff of our Transfer Pricing Department in Peru, is the largest and most experienced in the country.
		It comprises over 15 specialised economists, with a local and international experience in the matter, who are supported by Deloitte’s Global Transfer Pricing Team and the tax lawyers and accountants from our Tax and Legal Advice division, comprising over 40 professionals.
		In 2003, we constituted the Transfer Pricing Andean Group with our offices in Colombia and Venezuela, as the most efficient and effective manner to provide regional transfer pricing services, with uniform approaches and strategies and the consequent costs reductions for our clients.
	www.deloitte.com /dtt/section_node/0,1042,sid=84311,00.html (476 words)

	UWLS Transfer Pricing Workshop
		This Transfer Pricing Workshop will be oriented toward beginning to intermediate tax practitioners who have direct or indirect responsibility for performing transfer pricing analyses and/or preparing transfer pricing documentation or planning reports.
		Dr. Andrade is Director of the Transfer Pricing Valuation Institute and Assistant Professor of Law & Economics at the University of Washington School of Law, where he teaches courses and performs research in transfer pricing, taxation/valuation of intangibles and economic policy issues associated with intellectual property.
		Bonano's practice focuses on transfer pricing and international tax and he has significant experience with transfer pricing controversies.
	www.law.washington.edu /tax/tpw/ca (784 words)

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