Permanent Establishment

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Many non-EU companies seeking to expand into Europe will start with a presence in the UK due to language and cultural connections, the UK’s legal framework and access to capital markets.

What are the potential UK tax implications from such a presence? Read the rest of this entry »

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Comparability Analysis

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Most countries’ Transfer Pricing rules are based on the “arm’s length principle”, as defined by the Organisation for Economic Co-operation and Development (OECD).

This Note looks at the practical steps involved in actually carrying out a Comparability Analysis, which is a fundamental component part of the arm’s length principle, and builds on the concepts introduced in my two previous Notes. Read the rest of this entry »

Comparability Factors

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Most countries’ Transfer Pricing rules are based on the “arm’s length principle”, as defined by the Organisation for Economic Co-operation and Development (OECD).

The concept of “comparables” and their importance to the arm’s length principle was introduced in my previous Note in this category.

This Note looks at the five factors which the OECD Guidelines suggest be considered in a comparability analysis. Read the rest of this entry »

Diverted Profits Tax

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The UK Government announced in its 2014 Autumn Statement that it was introducing a new tax, the Diverted Profits Tax (DPT).

DPT is aimed at multinational enterprises (MNEs) that use contrived arrangements to bypass UK rules on Permanent Establishment (PE) and Transfer Pricing (TP) and so divert profits from the UK. Read the rest of this entry »

The Arm’s Length Principle

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This Note looks at the arm’s length principle in Transfer Pricing and introduces the concept of “comparables”.

“Comparables” basically means using comparable transactions to the connected-party transaction being reviewed, but between independent unconnected businesses. Such comparables are used to fix an arm’s length indicator, e.g. price or margin etc. (or the arm’s length range for a particular indicator). Comparables will be discussed further in my next Note. Read the rest of this entry »