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Transfer Pricing

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Local Comparables at All Costs!

17th November 2022

I vividly remember a conversation I had with a client during my professional services days. We had drafted a Polish transfer pricing report and had used German comparables to benchmark the German entity that was providing management services to a Polish affiliate.  The client was adamant that Poland would not accept these comparables, because, at ...

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Expect More Transfer Pricing Scrutiny From the IRS

10th November 2022

Cases like Coca-Cola, 3M, and Medtronic cases have emboldened the IRS when it comes to taking on transfer pricing disputes. And if the courts continue to side with the agency through the appeals processes, then the IRS is potentially looking at billions of dollars in payouts.   Experts expect the IRS to allocate a large portion ...

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CrossBorder Experts Weigh in on Western Digital’s $1.6B USD Tax Bill

04th November 2022

Our Experts Weigh In on Western Digital’s $1.6-billion Tax Bill Remote work has its advantages, but it has taken its toll on our watercooler chats. Still, some industry happenings are so interesting, they’re worth a Zoom face-to-face to hash it all out. Western Digital’s recent $1.6-billion tax settlement is one of them. But then we’ve ...

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Can Tax Reporting be Too Transparent?

04th October 2022

Taxpayers feel like they reveal so much by preparing country-by-country reports—one of the three reporting recommendations in the OECD’s BEPS Action 13 transfer pricing compliance initiative. And given that the reports list on a jurisdictional basis coveted financial data—income, tax paid and accrued, retained earnings, tangible assets, among other private info—you can certainly see their ...

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The Case for Following Tax Court Cases

29th September 2022

I am not an attorney by trade, so I never expected to be following court cases.  But these days, it’s hard to talk about transfer pricing without discussing the implications of recent high-profile cases like Coca-Cola and McDonald’s because the outcomes highlight key issues that impact our clients.    As a reminder, in 2020, Coca-Cola went ...

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The Clock is Ticking When Tax Authorities Request Your Local File

22th September 2022

Any important job can be a little stressful, but throw in a tight deadline and something as simple as brushing your teeth can become downright anxiety-provoking. No wonder the sound of ticking clocks and stopwatches are used to add layers of suspense in everything from horror movies to competitive cooking shows. Tax executives are no ...

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Today’s Challenges for Pillar One and Pillar Two

20th September 2022

By now you well know, Pillar One and Pillar Two are part of the OECD’s ongoing project of combatting tax evasion and shifting profits to low-tax jurisdictions. Pillar One (applicable for large multinationals) aims at allocating taxable income to countries based on revenue generated in countries. Pillar Two aims to ensure that income is taxed ...

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Master and Local Files Required in the UK: Are You Ready?

13th September 2022

A diverted profits tax. A diversion profits compliance facility. And yet no official master and local transfer pricing documentation requirements. It’s almost like HMRC wanted multinational companies to endure transfer pricing troubles. Of course, that’s about to change with the UK’s recent adoption of BEPS Action 13’s master and local file requirements, which take effect ...

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Debt Ceilings

30th August 2022

It’s been said that people can never be too thin or too rich—but does the same hold true for corporations? Many companies are facing new challenges as countries are putting them on a financial diet (caps on interest deductions, debt limits) to prevent what they consider to be an excessive cash drain. OK, so the ...

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Meet the Ultimate Followers: Tax Authorities

25th August 2022

As I often tell clients, transfer pricing compliance requires a proactive approach. Granted, that advice is about as exciting as yesterday’s news, but it is relevant and, if executed properly, it even transcends ahead-of-the-game documentation. A true proactive approach requires that you look around and see what tax authorities are doing—new legislation, guidance, etc.—and then ...