Search results
Results from the WOW.Com Content Network
Transfer pricing refers to the rules and methods ... increased to 40% of the additional tax where the adjustment exceeds US$20 million. [77] The rules of many ...
The pricing rules in the law and regulation are independent of the transfer pricing rules normally applicable to transactions between related parties. Thus, DISC profits are not dependent on the economic contribution of the DISC, and a DISC need have no substance.
However, Belgian CFC legislation is obsolete in practice given that the application of Belgian transfer pricing rules (i.e. article 185, § 2 of the Belgian Income Tax Code, allowing the Belgian tax authorities to implement an upwards adjustment of the profits in case of a breach of the arm's length principle) take precedence over CFC legislation.
Transfer pricing in the U.S. is governed by section 482 of the Internal Revenue Code (IRC) and applies when two or more organizations are owned or managed by the same interests. Section 482 applies to all transactions between related parties and commonly controlled parties, regardless of taxpayer intent, according to regulatory guidance.
The setting of the amount of related party charges is commonly referred to as transfer pricing. Many jurisdictions have become sensitive to the potential for shifting profits with transfer pricing, and have adopted rules regulating setting or testing of prices or allowance of deductions or inclusion of income for related party transactions.
To ensure that these transactions are priced according to the arm's length principle, many countries tax authorities have implemented transfer pricing rules. Countries with specific rules on transfer pricing are less attractive from a corporate perspective because they provide less scope for profit shifting. [2]
Get AOL Mail for FREE! Manage your email like never before with travel, photo & document views. Personalize your inbox with themes & tabs. You've Got Mail!
In 2015, the G20 supported the transfer pricing recommendations, which aims to guide governments on how profits of multinational companies should be divided among individual countries. Furthermore, the G20 is involved in developing a global tax framework.