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Transfer Pricing

Published: September 2018


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  • 1.

    Identify the principal transfer pricing legislation.

  • 2.

    Which central government agency has primary responsibility for enforcing the transfer pricing rules?

  • 3.

    What is the role of the OECD Transfer Pricing Guidelines?

  • 4.

    To what types of transactions do the transfer pricing rules apply?

  • 5.

    Do the relevant transfer pricing rules adhere to the arm’s-length principle?

  • 6.

    How has the OECD’s project on base erosion and profit shifting (BEPS) affected the applicable transfer pricing rules?

  • 7.

    What transfer pricing methods are acceptable?

  • 8.

    Are cost-sharing arrangements permitted? Describe the acceptable cost-sharing pricing methods.

  • 9.

    What are the rules for selecting a transfer pricing method?

  • 10.

    Can a taxpayer make transfer pricing adjustments?

  • 11.

    Are special ‘safe harbour’ methods available for certain types of related-party transactions? What are these methods and what types of transactions do they apply to?

  • 12.

    Does the tax authority require taxpayers to submit transfer pricing documentation? Regardless of whether transfer pricing documentation is required, does preparing documentation confer any other benefits?

  • 13.

    Has the tax authority proposed or adopted country-by-country reporting? What are the differences between the local country-by-country reporting rules and the consensus framework of BEPS Action 13?

  • 14.

    When must a taxpayer prepare and submit transfer pricing documentation?

  • 15.

    What are the consequences for failing to submit documentation?

  • 16.

    How long does the tax authority have to review an income tax return?

  • 17.

    If the tax authority asserts a transfer pricing adjustment, what options does the taxpayer have to dispute the adjustment?

  • 18.

    Does the country have a comprehensive income tax treaty network? Do these treaties have effective mutual agreement procedures?

  • 19.

    How can a taxpayer request relief from double taxation under the mutual agreement procedure of a tax treaty? Are there published procedures?

  • 20.

    When may a taxpayer request assistance from the competent authority?

  • 21.

    Are there limitations on the type of relief that the competent authority will seek, both generally and in specific cases?

  • 22.

    How effective is the competent authority in obtaining relief from double taxation?

  • 23.

    Does the country have an advance pricing agreement (APA) programme? Are unilateral, bilateral and multilateral APAs available?

  • 24.

    Describe the process for obtaining an APA, including a brief description of the submission requirements and any applicable user fees.

  • 25.

    How long does it typically take to obtain a unilateral and a bilateral APA?

  • 26.

    How many years can an APA cover prospectively? Are rollbacks available?

  • 27.

    What types of related-party transactions or issues can be covered by APAs?

  • 28.

    Is the APA programme widely used?

  • 29.

    Is the APA programme independent from the tax authority’s examination function? Is it independent from the competent authority staff that handle other double tax cases?

  • 30.

    What are the key advantages and disadvantages to obtaining an APA with the tax authority?

  • 31.

    Is the tax authority generally required to respect the form of related-party transactions as actually structured? In what circumstances can the tax authority disregard or recharacterise related-party transactions?

  • 32.

    What are some of the important factors that the tax authority takes into account in selecting and evaluating comparables? In particular, does the tax authority require the use of country-specific comparable companies, or are comparables from several jurisdictions acceptable?

  • 33.

    What is the tax authority’s position and practice with respect to secret comparables? If secret comparables are ever used, what procedures are in place to allow a taxpayer to defend its own transfer pricing position against the tax authority’s position based on secret comparables?

  • 34.

    Are secondary transfer pricing adjustments required? What form do they take and what are their tax consequences? Are procedures available to obtain relief from the adverse tax consequences of certain secondary adjustments?

  • 35.

    Are any categories of intercompany payments non-deductible?

  • 36.

    How are location savings and other location-specific attributes treated under the applicable transfer pricing rules? How are they treated by the tax authority in practice?

  • 37.

    How are profits attributed to a branch or permanent establishment (PE)? Does the tax authority treat the branch or PE as a functionally separate enterprise and apply arm’s-length principles? If not, what other approach is applied?

  • 38.

    Are any exit charges imposed on restructurings? How are they determined?

  • 39.

    Are temporary special tax exemptions or rate reductions provided through government bodies such as local industrial development boards?

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