Landmark transfer pricing disputes have become increasingly significant as tax authorities globally scrutinise multinational enterprises (MNEs) to ensure they comply with the arm’s length principle.
Landmark transfer pricing disputes to learn from Read More »
As businesses navigate the post-COVID landscape, the dynamics of outsourcing and transfer pricing have taken center stage. With 77% of European countries now favoring intra-continental outsourcing, the focus has shifted toward fortifying the global value chain (GVC) and reducing dependence on traditional outsourcing hubs like China and Russia.
The impact of outsourcing on transfer pricing in Eastern Europe Read More »
Cost allocation in Transfer pricing is a critical aspect of international taxation for multinational enterprises (MNEs). It is a key component is the proper allocation of costs, which ensures that intercompany transactions reflect an arm’s length standard, as required by the OECD Guidelines.
Cost allocation in Transfer Pricing documentation Read More »
Jelena Mihic Munjic and Elena Ramirez Marin recently shared their insights on transfer pricing impact on SMEs with Bloomberg Tax.
Transfer pricing impact on SMEs: Commentary for Bloomberg Tax Read More »
In a recent feature on women in accounting, Liza Robbins, Chief Executive of Kreston Global, Jelena Mihić Managing Director at Kreston MDM Serbia, and Carmen Cojocaru, ESG Technical Director and Managing Partner at Kreston Romania, share their perspectives on gender diversity and inclusion in the accounting profession in an article for The Accountant.
Jurisdiction United States, Tax Court and Seventh Circuit Summary of Facts Abbott Labs challenges IRS regulations requiring cost-sharing arrangements and service charges to include stock-based compensation costs. This case is a continuation of disputes seen in Altera and Xilinx. Key Issues The validity of regulations mandating the inclusion of stock-based compensation in cost bases for
Jurisdiction United States, Tax Court and Eighth Circuit Summary of Facts The case involves the concept of “blocked income,” where Brazilian law capped royalty rates on IP licenses between a local subsidiary and its foreign parent. The IRS reallocated income despite these legal restrictions. Key Issues Whether the IRS can reallocate income classified as blocked
Jurisdiction United States, Tax Court and Eighth Circuit Summary of Facts Medtronic’s case revolves around determining the appropriate arm’s-length royalty for the U.S. subsidiary’s license of intellectual property (IP) necessary to manufacture implantable medical devices. The dispute primarily concerns the best transfer pricing method to use. Key Issues The IRS favors the Transactional Net Margin
Jurisdiction Sweden, County Administrative Court of Gothenburg Summary of Facts This case involved the deductibility of a license fee paid by a Swedish company (AB) to a Maltese group company (Corp) for the use of a trademark. The Swedish Tax Agency (STA) argued that Corp, despite being the legal owner of the trademark, did not
Jurisdiction European Union, Court of Justice of the European Union (CJEU) Summary of Facts The CJEU annulled the European Commission’s decision that Volotea and easyJet received illegal state aid through Italian regional law funding. Key Issues Whether the state aid given to airlines for air route development constituted an unfair advantage. Decision and Reasoning The
Volotea v. Commission, and easyJet v. Commission Read More »
Jurisdiction Norway, Court of Appeal Summary of Facts The case involved a loan agreement between ConocoPhillips Norway and its subsidiary, with the tax authority challenging the interest rate as not being at arm’s length. Key Issues Whether the interest rate on the loan followed the arm’s length principle. Decision and Reasoning The court ruled in
Jurisdiction India, Income Tax Appellate Tribunal (ITAT) Summary of Facts Olympus Medical Systems India faced a transfer pricing audit due to financial losses, with the tax authority demanding audited financials of affiliated entities and using the residual profit split method. Key Issues The appropriateness of the residual profit split method and the requirement for audited
Description We worked with a leading company in the manufacturing and distribution of consumer goods sector. The company had a global network of manufacturing and distribution centers and faced challenges in aligning transfer pricing with regulatory frameworks and achieving efficient transfer pricing management in all entities. Solution We conducted a comprehensive analysis of the company’s
Transfer Pricing in the Consumer Goods Manufacturing and Distribution Sector Read More »
Description We conducted a transfer pricing optimization project for a company in the information technology sector with a global presence and a complex business model. The company wanted to improve the efficiency of its transfer pricing, ensure consistency in the application of transfer pricing, and reduce tax risks. Solution Our team of transfer pricing experts
Transfer Pricing in the Information Technology (IT) Sector Read More »
Description Our company collaborated with a large energy sector company active in renewable energy. The company faced complex challenges in aligning transfer pricing with the regulatory framework in the countries where it operated and efficiently managing transfer pricing between different entities in its business chain. Solution Our team analyzed regulatory requirements and tax regulations in
Transfer Pricing in the Energy and Renewable Energy Sector Read More »
Description Our team worked with a large pharmaceutical company that faced the complexity of managing transfer pricing in a global network of entities. The company wanted to improve its transfer pricing documentation, reduce the risk of tax disputes, and ensure consistency in the application of transfer pricing. Solution We conducted a thorough review of the
Optimization of Transfer Pricing for a Pharmaceutical Company Read More »
Description We worked with a startup company in the technology sector that was in the growth phase and expanding into the global market. The company faced challenges in setting appropriate transfer pricing for its products and services and complying with tax regulations in various jurisdictions. Solution Our team conducted a thorough analysis of the company’s
Transfer Pricing Analysis for a Startup in the Technology Sector Read More »
Description Our firm was engaged by a multinational company in the automotive industry to help optimize their transfer pricing. The company had an extensive network of related entities in various countries and faced challenges in aligning their transfer pricing with international standards and regulations. Solution Our team of transfer pricing experts conducted a comprehensive analysis
Optimization of Transfer Pricing for a Multinational Company in the Automotive Industry Read More »
Jurisdiction India, Income Tax Appellate Tribunal (ITAT) Summary of Facts The ITAT ruled in favor of Kellogg India, which had used the AE as the tested party for benchmarking the import of Pringles products, despite the tax authorities’ preference for the Indian entity as the tested party. Key Issues The appropriateness of the transactional net
Jurisdiction United Kingdom, Upper Tribunal (UT) Summary of Facts HMRC disputed BlackRock’s inter-company loan arrangements following its acquisition of Barclays Global Investors, challenging the arm’s length nature of the loan interest rates. Key Issues Whether the interest rates on inter-company loans were compliant with the arm’s length principle. Decision and Reasoning The UT ruled in
Jurisdiction France, French Tax Authority (le fisc) Summary of Facts ST Dupont faced pricing adjustments following an audit, with allegations that the prices at which it sold merchandise to its Hong Kong subsidiary were below the arm’s length level. Key Issues The investigation focused on whether the royalty rates and transfer prices between ST Dupont
Jurisdiction France, French Tax Authority (le fisc) Summary of Facts McDonald’s agreed to pay €1.25 billion ($1.31 billion) following an investigation into its transfer pricing arrangements, marking one of the largest tax settlements in French history. Key Issues The investigation revealed that McDonald’s shifted profits abroad through increased royalties, avoiding substantial tax payments in France.
Jurisdiction European Union, Court of Justice of the European Union (CJEU) Summary of Facts The European Commission concluded that Luxembourg provided illegal state aid to Fiat Chrysler Finance Europe by approving an advance transfer pricing arrangement that did not comply with the arm’s length principle. Key Issues The case focused on whether the Commission’s interpretation
Fiat Chrysler Finance Europe v. European Commission Read More »
Jurisdiction Australia, Australian Taxation Office (ATO) Summary of Facts Rio Tinto agreed to pay A$613 million ($424 million) to the ATO following allegations of profit-shifting to its Singapore marketing center. This settlement is in addition to an already paid A$378 million, totaling nearly A$1 billion in tax. Key Issues The case focused on whether Rio
Jurisdiction Denmark, Danish Tax Agency (SKAT) Summary of Facts Maersk Oil and Gas faced allegations of using an aggressive transfer pricing arrangement to report losses despite high profitability. The dispute involved a know-how license agreement with subsidiaries in Algeria and Qatar, where the parent company received a 1.7% royalty rate. Key Issues The main issue