Strategizing International Tax Best Practices – by Keith Brockman

Archive for the ‘Transfer Pricing’ Category

UN link to source of relevant information

http://www.un.org/esa/ffd/tax/
This site is a valuable resource of information, including the following topics and links to relevant documents:

  • Strengthening UN role in international tax cooperation
  • UN Model Convention
  • Transfer Pricing (including Practical Manual for Developing Countries)
  • Exchange of information on tax matters
  • Manual for the Negotiation of Bilateral Tax Treaties
  • Capacity Building

I invite you, and members of your team, to fully explore the site and use as a basis for international tax training and reference.

This link is also added to my new “Recommended Links” page for future reference.

Category:

OECD / UN, Transfer Pricing

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European Council May Agenda: Energy; Tax Evasion/Avoidance/Fraud

http://www.european-council.europa.eu/the-president.aspx

In a speech by European Council President Herman Van Rompuy, he mentioned energy and taxes as two issues that will be discussed at the meeting in May.  Interestingly, the press release states: “The other issue I put on the May agenda for European leaders is tax evasion and avoidance.  There we have to seize the current political momentum, especially on improving exchange of information between our countries.  Tax fraud is exactly the kind of issue where it is first and foremost for Member States to act, but where they cannot effectively do so on their own.”

  • The phrases “tax evasion,” “avoidance” and “tax fraud” all seem be used interchangeably with no distinction in application or meaning.  This seems to be a growing trend in public communications, leading to potentially wrong conclusions and inappropriate actions.  Ensure the relevant phrases, supplemented by intent, are used to convey the message.
  • Ensure one or more members of Tax are keeping aware of these meetings and trends.
  • Inform senior management regularly of current trends, as perceived by the European Council and Member States.

Category:

Transfer Pricing

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Information exchange, good governance & Best Practices

Click to access c_2012_8805_en.pdf

European Commission Recommendation of 6/12/2012 regarding measures intended to encourage third countries to apply minimum standards of good governance in tax matters.

The European Commission focuses on automatic exchange of information to be widely applied, per attached reference.  Section B.1, Access to Information, provides: Competent authorities of the third country concerned have the power to obtain and provide information that is the subject of a request under an agreement on exchange of information, from any person within their territorial jurisdiction who is in possession or control of such information.

Best Practice points to consider:

  • Globally consistent process of providing tax information to all tax authorities
  • Coordination of local Business/Regional & Corp. HQ for all transfer pricing responses to tax authorities
  • Educating Business Units re: Ways of Working by tax authorities for a better understanding of global risks
  • Ensuring local Business Units are aware of general transfer pricing methodologies utilized
  • Continual awareness of Business Finance Leaders of transfer pricing risks and exchange of information

 

Category:

Transfer Pricing

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S. Africa TP Interpretation Note: Treasury/Tax Alignment

SARS Draft Interpretation Note, issued March 22, 2013, describes in Section 7 “Risk Assessment and Selection of Cases for Audit,” concepts for determination of thin capitalization thresholds and an arms-length rate of interest on inbound loans.  The Note is attached for reference.  From a Best Practices approach, I have the following queries:

  • How are Treasury & Tax functions aligned to maximize opportunities for this type of development?
  • How are you timely notified of such developments (i.e. local Business, external advisors, Tax Notes Int’l., etc)
  • Does your company have a stated process re: providing public comment for such guidance?
  •  From a RACI Model perspective, are roles aligned to address this Note?
  • Who determines if proactive debt/equity planning scenarios are reviewed, and relevant timelines?
  • How are the proposed transfer pricing analyses integrated into the transfer pricing documentation framework?

I welcome your input.

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Category:

Transfer Pricing