Download or read book The Future of the Profit Split Method written by Gabriella Cappelleri and published by Kluwer Law International B.V.. This book was released on 2020-11-23 with total page 341 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Future of the Profit Split Method Edited by Robert Danon, Guglielmo Maisto, Vikram Chand & Gabriella Cappelleri Among the various transfer pricing methods, the profit split method (PSM) is under the spotlight after the OECD’s Base Erosion and Profit Shifting (BEPS) project. However, both expert analysis and experience indicate that this method is not straightforward either for taxpayers to apply or for tax administrations to evaluate. In this thorough and detailed commentary – the first book to analyse this increasingly adopted transfer pricing method – notable scholars and practitioners working in the international tax community express their views on the method, answering some unresolved questions and highlighting issues that are still open and pending, especially in light of the digitalization of the economy. Crucial issues covered by the contributors include the following: choice of the appropriate splitting factors, their relative weights, and valuation of the contributions; uncertainties and outcomes potentially not aligned with the arm’s-length standard; possible role of assessments made by the European Commission on State aid; nexus with the work done by the EU Joint Transfer Pricing Forum; impact of profit split on indirect taxes (VAT/customs tax/excise tax); and application to digital business models and, in general, to the digitalized economy. Moreover, relevant experience of applying this method in France, Germany, Italy, Spain, Switzerland, the United Kingdom, and the United States is provided. A concluding chapter also deals with selected industry experiences. Due to a high level of uncertainty in alignment with international guidance in the application of the PSM – and to the underdeveloped nature of current literature on the subject – there is a need for this book because both tax administrations and taxpayers, going forward, will apply the PSM extensively. The book is highly relevant for policymakers, tax administrations, practitioners and academics engaged in the areas of international taxation, transfer pricing and tax policy.

Download or read book The Transfer pricing Profit split Method After BEPS Back to the Future written by M. Kobetsky and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2018, the Organisation for Economic Co-operation and Development/Group of Twenty (OECD/G20) Inclusive Framework on base erosion and profit shifting (BEPS): action 10 issued revised guidance on the transactional profit-split method. Regrettably, the revised guidance failed to provide the opportunity for the profit-split method to be more often the most appropriate transfer-pricing method. The revised guidance expressly states that the lack of comparable uncontrolled transactions, by itself, is not a basis for the use of the profit-split method. Under the former guidance, the profit-split method was used infrequently. In the revised guidance, the threshold requirements for the use of the profit-split method are still restrictive. Consequently, it is likely that the profit-split method will rarely be the most appropriate transfer-pricing method. Nevertheless, the residual profit-split method is being considered for BEPS action 1, on the taxation of the digital economy. Two of the proposals under pillar 1 of the Inclusive Framework's 2019 short policy note involve the use of the residual profit-split method to allocate profits. These proposals involve new profit allocation rules that go beyond the arm's-length principle.

Download or read book Expansion of the Profit Split Method written by Jeffery M. Kadet and published by . This book was released on 2015 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recognizing the reality that multinational corporations are centrally managed and not groups of entities that operate independently of one another, the OECD base erosion and profit-shifting project is considering expanded use of the profit-split method. This article provides background on why expanded use of the profit-split method is sorely needed. In particular, resource-constrained tax authorities in many countries are unable to administer or intelligently analyze and contest transfer pricing results presented by multinational groups. Most importantly, this article suggests a simplified profit-split approach using set concrete and objective allocation keys for commonly used business models that should be welcomed by multinational groups and tax authorities alike.

Download or read book Profit split Method Time for Countries to Apply a Standardized Approach written by J.M. Kadet and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this article, the authors discuss the future of the profit-split method.

Download or read book The Profit Split Method Historical Evolution and BEPS Insights part 1 written by R. Petruzzi and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This article is the first of a three-part contribution that attempts to provide an outlook on the historical development, the status quo, and the future direction of the profit split method, especially by taking into account the outcome of the OECD/G20 base erosion and profit shifting (BEPS) project. This article particularly examines the latest OECD discussion draft, "Revised guidance on profit splits", and further discusses the direction that the discussion draft might lead to in the future, given the direct and immediate impacts the discussion draft might have on the future development of the profit split method.

Download or read book The Profit Split Method Insights from BEPS Follow ups part 3 written by R. Petruzzi and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This article is the third part of a three-part contribution that attempts to provide the historical development, status quo, and future direction of the profit split method, especially by taking into account the OECD/G20 base erosion and profit shifting (BEPS) project. This article ponders the role of the profit split method in the future BEPS work, namely the application within the 2008 OECD "Report on the attribution of profits to permanent establishments" and the possibility of it being a toolkit for developing countries.

Download or read book The Profit Split Method a Holistic View of BEPS in Transfer Pricing part 2 written by R. Petruzzi and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This article is the second part of a three-part contribution that attempts to provide the historical development, status quo, and future direction of the profit split method, especially by taking into account the OECD/G20 base erosion and profit shifting (BEPS) project. This article walks through the relevant BEPS developments on transfer pricing and presents the interplay between the profit split method and other transfer pricing aspects under the current BEPS system.

Download or read book The Profit Split Method written by Vikram Chand and published by . This book was released on 2015 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this coauthored publication, the authors analyse whether the OECD's base erosion and profit shifting (BEPS) project would increase the use of the profit split method. After reviewing the current landscape in this context, the authors focus on situations in which the profit split method applies, the various approaches that can be used to split the profit among associated enterprises and reasons why the profit split method has been infrequently applied. Finally, the authors present their views on the application of the profit split method in light of the BEPS Action Plan.

Download or read book Profits in Profit split Methods Hazardous Crossovers on the Way to Global Formulary Apportionment written by R. Robillard and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The author examines the OECD's guidance on the profit-split method from the introduction of the Transfer Pricing Guidelines in 1979 to today, emphasizing the consistency of the guidance on the determination of profits to split and pointing to a shift, one he sees as hazardous, in the guidance on the split of the profits.

Download or read book Intangibles in the World of Transfer Pricing written by Björn Heidecke and published by Springer. This book was released on 2021-03-10 with total page 725 pages. Available in PDF, EPUB and Kindle. Book excerpt: Intangible assets are becoming increasingly important as value drivers for multinational companies. It is a strategic question how to allocate intangibles within the multinational corporation. It needs to be defined by whom and under which conditions they can be utilized. Typical IP migration models such as licensing, joint development and transferring are becoming a focal point within tax audits across the globe. Hence,defining an intangibles system that fulfils the tax requirements is of utmost strategic importance for multinational corporations. A central question is how to value intangibles in line with the arm’s length principle as is required internationally for transfer pricing purposes. Edited by leading transfer pricing and valuation experts in Europe, this comprehensive book offers practitioners an effective road map for identifying, valuing and implementing intangibles for transfer pricing purposes under consideration of both the OECD and local perspectives. It is therefore a must-have book for transfer pricing and valuation practitioners on all levels of experience. The book starts with an introduction to the role of intangibles in the world of transfer pricing including typical intangibles migration models. It describes common intangible assets across all types of industries, including e.g. automotive, consumer goods and software.Using several numerical examples, the book then covers state-of-the-art valuation methods including how to apply these methods in practice in a way consistent with the OECD Transfer Pricing Guidelines. The different country chapters written by local experts provide country-specific guidance on the legal framework concerning intangible assets from a transfer pricing and valuation perspective. Finally, the book covers practical advice on the implementation of an intangible assets system. This book offers invaluable guidance to practitioners seeking tools to apply the arm’s length principle in the world of intangibles.

Download or read book Fundamentals of International Transfer Pricing in Law and Economics written by Wolfgang Schön and published by Springer Science & Business Media. This book was released on 2012-02-15 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: The taxation of multinational corporate groups has become a major concern in the academic and political debate on the future of international taxation. In particular the arm’s length standard for the determination of transfer prices is under increasing pressure. Many countries and international bodies are now taking a closer look at the use of transfer prices for profit shifting and are exploring alternative mechanisms such as formulary apportionment for the allocation of taxing rights. With regard to this topic, this volume is the first to offer a concise analysis of transfer pricing in the international tax arena from an interdisciplinary legal and economic point of view. Fundamentals such as the efficient allocation of resources within multi-unit firms and distortions between different goals of transfer pricing as well as different aspects of it in tax and corporate law, the traditional OECD approach and practical aspects concerning intangibles, capital and risk allocation are covered by outstanding authors.

Download or read book Does the Profit Split Method Apply to Principal Structures written by P. Goppelsroeder and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this article is to address whether the profit split method (PSM), in particular, the transactional PSM (TPSM) applies to principal structures in multinational enterprises (MNEs). It takes into account the shift in focus of the post-BEPS amendments, especially the 2017 OECD Guidelines and the 2018 Revised Guidance on the Application of the Transactional Profit Split Method. The main focus is on the possible departure from the arm's length principle in the 2019 consultation document of the OECD on a unified approach to profit allocation under Pillar One. Will this unified approach (deemed 'PSM' on consolidated MNE level) improve the world order between global MNEs and local tax authorities and lead to less disputes and less double taxation?

Download or read book The Allocation of Multinational Business Income Reassessing the Formulary Apportionment Option written by Richard Krever and published by Kluwer Law International B.V.. This book was released on 2020-02-20 with total page 307 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Allocation of Multinational Business Income: Reassessing the Formulary Apportionment Option Edited by Richard Krever & François Vaillancourt Although arm’s length methodology continues to prevail in international taxation policy, it has long been replaced by the formulary apportionment method at the subnational level in a few federal countries. Its use is planned for international profit allocation as an element of the European Union’s CCCTB proposals. In this timely book – a global guide to formulary apportionment, both as it exists in practice and how it might function internationally – a knowledgeable group of contributors from Australia, Canada, the United Kingdom and the United States, address this actively debated topic, both in respect of its technical aspects and its promise as a global response to the avoidance, distortions, and unfairness of current allocation systems. Drawing on a wealth of literature considering formulary apportionment in the international sphere and considering decades of experience with the system in the states and provinces of the United States and Canada, the contributors explicate and examine such pertinent issues as the following: the debate about what factors should be used to allocate profits under a formulary apportionment system and experience in jurisdictions using formulary apportionment; application of formulary apportionment in specific sectors such as digital enterprises and the banking industry; the political economy of establishing and maintaining a successful formulary apportionment regime; formulary apportionment proposals for Europe; the role of traditional tax criteria such as economic efficiency, fairness, ease of administration, and robustness to avoidance and incentive compatibility; determining which parts of a multinational group are included in a formulary apportionment unit; and whether innovative profit-split methodologies such as those developed by China are shifting traditional arm’s length methods to a quasi-formulary apportionment system. Providing a comprehensive understanding of all aspects of the formulary apportionment option, this state of the art summary of history, current practice, proposals and prospects in the ongoing debate over arm’s length versus formulary apportionment methodologies will be welcomed by practitioners, policy-makers, and academics concerned with international taxation, all of whom will gain an understanding of the case put forward by proponents for adoption of formulary apportionment in Europe and globally and the counter-arguments they face. Readers will acquire a better understanding of the implications of formulary apportionment and its central role in the current debate about the future of international taxation rules. “...providing (sic) all the intellectual ammunition needed to carefully re-examine one of the ideas traditionally considered as apocryphal by the OECD and to a significant portion of the tax professional community...readers of this book will come away not only with a renewed understanding of the multiple facets of formulary apportionment, but also of some of the fundamental pressure points in the international tax system. Accordingly, it is a welcome and timely addition to the literature. ” Dr. Stjepan Gadžo, Assistant Professor at University of Rijeka, Faculty of Law / British Tax Review 2021, Issue 2, p243-246

Download or read book Election and Verification of the Cost Sharing Or Profit Split Method written by and published by . This book was released on 1987 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Advanced Issues in International and European Tax Law written by Christiana HJI Panayi and published by Bloomsbury Publishing. This book was released on 2015-12-03 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines recent developments and high-profile debates that have arisen in the field of international tax law and European tax law. Topics such as international tax avoidance, corporate social responsibility, good governance in tax matters, harmful tax competition, state aid, tax treaty abuse and the financial transaction tax are considered. The OECD/G20 project on Base Erosion and Profit Shifting (BEPS) features prominently in the book. The interaction with the European Union's Action Plan to strengthen the fight against tax fraud and tax evasion is also considered. Particular attention is paid to specific BEPS deliverables, exploring them through the prism of European Union law. Can the two approaches be aligned or are there inherent conflicts between them? The book also explores whether, when it comes to aggressive tax planning, there are internal conflicts between the established case law of the Court of Justice and the emerging policy of the European institutions. By so doing it offers a review of issues which are of constitutional importance to the European Union. Finally, the book reflects on the future of international and European tax law in the post-BEPS world.

Download or read book The Transfer Pricing of Intangibles written by Michelle Markham and published by Kluwer Law International B.V.. This book was released on 2005-01-01 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: Transactions involving intellectual property play an increasingly significant role in economic activity at every level from global to local, with particular challenges for taxation and revenue authorities. Moreover, the manifold complexities associated with identifying, valuing and transferring intangibles make this an issue requiring a creative review of existing transfer pricing methodologies and techniques. In this ground-breaking new study, Michelle Markham offers an in-depth examination of attitudes at the forefront of this rapidly evolving area of taxation law, focusing her work on a comparative analysis of the US, OECD, and Australian perspectives on the transfer pricing of intangible assets. The Transfer Pricing of Intangibles not only highlights the current problems encountered in inter-affiliate transactions of intangible property, but also attempts to offer a variety of solutions to these problems. Among the issues explored are the following: how the tax treatment of intangible in the context of transfer pricing has become a major international tax concern;definitional issues which are vital to an understanding of transfer pricing;application of the arm's length principle to intangible asset transactions;determination of legal and economic ownership of group intangible assets;intangible asset valuation and transfer;transfer pricing methodologies;global formulary apportionment;transfer pricing documentation requirements;penalties for non-compliance;resolution of transfer pricing disputes; and,advance pricing agreements Revenue authorities, multinational enterprise executives, and tax practitioners around the world will greatly appreciate the recommendations and solutions proposed in this knowledgeable and thoughtful book. Its acute sense of the opportunities and pitfalls of an ever-more-complex area of economic activity place it in a category of its own, of inestimable benefit to interested parties.

Download or read book Exploring Residual Profit Allocation written by Sebastian Beer and published by International Monetary Fund. This book was released on 2020-02-28 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Schemes of residual profit allocation (RPA) tax multinationals by allocating their ‘routine’ profits to countries in which their activities take place and sharing their remaining ‘residual’ profit across countries on some formulaic basis. They have recently and rapidly come to prominence in policy discussions, yet almost nothing is known about their impact on revenue, investment and efficiency. This paper explores these issues, conceptually and empirically. It finds residual profits to be substantial, but concentrated in a relatively few MNEs, headquartered in few countries. The impact on tax revenue of reallocating excess profits under RPA, while adverse for investment hubs, appears beneficial for lower income countries even when the formula allocates by destination-based sales. The impact on investment incentives is ambiguous and specific both to countries and MNE groups; only if the rate of tax on routine profits is low does aggregate efficiency seem likely to increase.