Transfer Pricing

“Intra-group reinsurance transfer pricing in a post-BEPS world”

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Originally published by Grant Thornton UK LLP, 9 May 2016

Reinsurance is a common connected-party transaction for groups operating in the insurance sector. This 2016 article from Grant Thornton discusses a key change to the OECD Transfer Pricing Guidelines arising from BEPS and how it impacts the transfer pricing of intra-group reinsurance.

The article concludes that “for many groups there is unlikely to be a sea change in the transfer pricing analysis performed, but there will be a greater level of documentation and evidence required to support the nature of the analysis performed.”

Source article here

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“‘Google tax’ nets HMRC £281m”

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Source: accountancy age.com 14 September 2017

“Diverted profits tax revenue collected by HMRC in 2016-17 totalled £281m, leaping from £31m collected in the previous year, according to data released by HMRC.”

“However, law firm Pinsent Masons said that many DPT disputes become transfer pricing disputes, and HMRC is spending an increasing amount of time settling the cases.”

““Transfer pricing disputes are taking HMRC nearly two-and-a-half years to settle – a year longer than its internal target. This is creating a serious backlog,” said Heather Self, partner at the firm.”

“Self said that she expected the number of DPT charging notices issued by HMRC to increase next year, as the tax applies to profits arising from 1 April 2015, and the deadline for notices for the period ending 31 December 2015 is 31 December 2017.”

Source article here

 

15 September 2017 deadline for responses to OECD discussion draft on attribution of profits to PEs

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The June 2017 discussion draft sets out high-level general principles for the attribution of profits to PEs in the circumstances addressed by Action 7 of the BEPS Action Plan.

It gives guidance on the following:

  • PEs arising from article 5, paragraph 5 of the OECD model treaty, including examples of a commissionnaire structure for the sale of goods, an online advertising sales structure, and a procurement structure.
  • PEs created as a result of the changes to article 5, paragraph 4, including an example on the attribution of profits to PEs arising from the anti-fragmentation rule included in new paragraph 4.1 of article 5.

Interested parties are reminded to send comments on the proposals in the June 2017 discussion draft by September 15, 2017.

(Further comments are not invited on the 2016 discussion draft and on the PE definitions agreed in Action 7 that were published in the 2015 Final Report.)

June 2017 Discussion Draft here

 

Court Rules In Favor Of Taxpayer In Canadian Transfer Pricing Audit Case

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Source: offshorenewsflash.com 23 August 2017

“The Federal Court of Canada has ruled that the Canadian Revenue Agency may not conduct further in-person interviews with representatives from a multinational corporation concerning its transfer pricing affairs, having already discussed earlier tax years.

Ruling in favor of Cameco Corporation, the Federal Court, in Minister of National Revenue v Cameco Corporation (2017 FC 763), noted that the Minister’s power “is not so wide to compel an indeterminate number of people for oral interviews.””

Source article here