This is a newsletter designed to provide senior tax executives (VP of Tax and Tax Directors) updates every two months on the latest issues within transfer pricing.
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The Arm's Length Standard, February 2006
The Czech tax authorities have issued a decree that introduces the concept of binding rulings – advance pricing agreements – in the Czech Income Taxes Act. Decree 292 of December 23, 2005, introduces new section 38 (nc) of the Czech Income Taxes Act on rulings for the determination of prices in related-party transactions.
The Arm's Length Standard, December 2005
The European Commission on 10 November 2005 adopted a proposal for a Code of Conduct on transfer pricing documentation prepared by the EU Joint Transfer Pricing Forum (JTPF). The Code of Conduct standardizes documentation across the 25 EU member states. The EU Commission proposes that member states agree to an EU-wide common approach to transfer pricing documentation requirements.
The Arm's Length Standard, October 2005 - Special Edition
On August 30, 2005, the U.S. Tax Court filed its opinion in Xilinx Inc. and Subsidiaries v. Commissioner, 125 T.C. 4 (2005), holding that the arm’s length standard described in Treas. Reg. §1.482-1(b)(1) did not require the taxpayer to share stock option costs with other cost sharing agreement (CSA) participants during the 1996-1999 taxable years.
The Arm's Length Standard, October 2005
The U.S. Treasury and the IRS on August 22 issued long-awaited proposed regulations governing the application of Internal Revenue Code section 482 to intercompany cost-sharing agreements (CSAs). The proposed regulations, over 200 pages long, adopt sweeping changes to the conceptual framework for determining so-called buy-ins, now referred to as preliminary or contemporaneous transactions (PCTs). The proposed regulations also provide new guidance on the application of periodic adjustments to buy-ins.
The Arm's Length Standard, August 2005
China’s State Administration of Taxation (SAT) and Japan’s National Tax Authority (NTA) in March 2005 held their second competent authority meeting in Shenzhen, Southern China, to discuss a bilateral advance pricing agreement (APA) application filed by a Japanese multinational corporation and its subsidiary located there. The written agreement was signed in May 2005.
The Arm's Length Standard, June 2005
China’s State Administration of Taxation (SAT) and Japan’s National Tax Authority (NTA) in March 2005 held their second competent authority meeting in Shenzhen, Southern China, to discuss a bilateral advance pricing agreement (APA) application filed by a Japanese multinational corporation and its subsidiary located there. The written agreement was signed in May 2005.
The Arm's Length Standard, April 2005
Italy’s Ministry of Economy and Finance on February 2 issued a resolution in response to a ruling request filed by an Italian commissionaire regarding the tax treatment of transactions carried out with its Swiss principal.