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The leading forces in global transfer pricing

TPWeek is asking tax practitioners and policy observers who, or what, they think is the leading force in transfer pricing for 2013.

Last year around 700 people voted, with the OECD coming out on top and receiving 31% of the vote. Other nominations included ActionAid, Pranab Mukherjee the Indian Minister of Finance, PwC and the Taskforce on Financial Integrity and Economic Development.

The nominations this year, put forward by TPWeek's editorial team, are listed below, with the opportunity to cast your vote at the bottom of this page. The nominations represent some of the biggest transfer pricing developments and headlines over the past year.

Remember: a leading force does not necessarily have to have a positive impact but it does need to have an overwhelming impact on the outcome and development of transfer pricing policy. Cast your vote now. Voting closes on May 20 2013.

Place your vote here:

This poll is closed.

In alphabetical order, the 2013 nominations are:

The Big 4

The Big 4 invest a great deal of time and resources into transfer pricing policy. They are present at all OECD consultations, and other organisations' tax meetings, and also employ some of the greatest minds in the field when it comes to experience and know-how. Consequently, they are collectively responsible for pushing forward a number of transfer pricing policies present in the OECD guidelines now and in the future.

But, they do not always receive the best press. They were accused by the UK Parliament's Public Accounts Committee of facilitating tax avoidance by multinationals, for instance. The Big 4 clearly have their critics but their might in pushing for policy and regulation changes is indisputable.


The BRICS members have been particularly vocal about international tax and transfer pricing issues over the past year, not least in the UN meetings when the practical manual for transfer pricing in developing countries was being finalised.

All but Russia insisted on inserting their own separate chapters in the manual, discussing the location-specific issues of transfer pricing in their jurisdiction and how they differ from the OECD transfer pricing guidelines.

Their economic might, combined with their increasingly loud voice in the international tax debate, means they are able to push their tax agendas more and more and may have a big influence on any lesser developed, non-OECD member countries that are also implementing transfer pricing regulations. Their commitment to work together more on tax issues may prove even more formidable.

Dell (Norway)

The Norwegian Dell case set a worldwide example for the treatment of permanent establishment.

The heart of the case was whether Dell Products, a Dutch company resident in Ireland, had a PE in Norway due to the marketing activities carried out by the Norwegian company Dell AS. Norway's Supreme Court found in favour of the taxpayer.

Since Dell's SC hearing in Norway, there has been numerous other cases internationally, which relate to the facts of Dell's case, including:

In addition, the OECD is now considering a revision of the interpretation and application of permanent establishment, though its work is concerning taxpayers who fear the project, which recommends widening the scope of the definition, could lead to less certainty.

GSK Canada SC decision

The Supreme Court of Canada gave its decision in the GlaxoSmithKline case in October 2012, dismissing the Canada Revenue Agency's appeal of a ruling by the Federal Court of Appeal.

After this ruling, intercompany agreements matter more than ever - taxpayers can no longer rely on simply taking apart tax authority analysis; they have to produce arguments in favour of their price.

The case will now return to the Tax Court of Canada for redetermination because the SC also dismissed GSK's cross-appeal, which asked it to overturn the decision of the Federal Court of Appeal to remit the matter to the Tax Court.

Indian ITAT

The Indian ITAT is churning out transfer pricing decisions on what seems like an almost daily basis. So far this year it has issued rulings in important cases such as:

The rulings are followed by companies all over the world, not just because of the uncertain tax positions in India but because the issues raised are also relevant to uncertain positions in many other countries. While the rulings are not binding in other countries, they can act as a candle in the dark.


The OECD has been busy producing transfer pricing-related reports, from safe harbours to timings issues and intangible assets over the last year. Despite the importance of the intangibles project, which is still steaming ahead and saw the organisation come first in this poll last year, the real attention grabber in the last 12 months has been the base erosion and profit shifting (BEPS) report.

One of the critical issues that the BEPS project is examining is the use by multinational companies of transfer pricing to shift profits to low-tax jurisdictions. The impact the BEPS project will have on transfer pricing is uncertain, though it is bound to be significant.

BEPS is questioning the bedrock of transfer pricing: the arm's-length principle. The OECD admits that international tax regulations have not kept pace with the evolution of business.


The UK Parliament's Public Accounts Committee has won worldwide coverage for its inquiry into how multinational entities are taxed in the UK.

The committee heard that Starbucks's transfer pricing policies - particularly the way it paid royalties internally - enabled the operator of coffee shops around the world to pay just ?8.6 million ($13.8 million) in UK tax over the last 14 years, despite making ?3 billion in sales in that time and telling investors the business was profitable.

The PAC has prompted other governments to further question the level of tax paid by companies and their transfer pricing arrangements. It has also forced companies to look at their structures more closely to determine whether, even though they may be legal, they could create bad public feeling for the company.

Tax Justice Network's (TJN) campaign for unitary taxation

While the concept is not supported by all - it has little support among tax executives and practitioners - unitary taxation has risen up the list of possible reforms to international tax rules because of an aggressive campaign by the Tax Justice Network, its biggest proponent.

Parts of the concept however, including formulary apportionment - the most commonly mentioned alternative to the arm's-length principle - are being considered seriously by some tax policy makers and politicians around the world.

Unitary taxation, according to the TJN, would treat a multinational company as a single entity, requiring it to submit a single set of worldwide consolidated accounts in each country where it has a business presence, then apportioning the overall global profit to the various countries according to a weighted formula reflecting its genuine economic presence in each country. Each country involved would then see the combined report and then tax its portion of the global profits at the local rate.


The UN's practical manual on transfer pricing for developing countries will be published in full in May.

The manual aims to provide taxpayers with insight into transfer pricing practices in developing countries, which have different priorities and place different values on certain business functions.

It stands as another dimension to the transfer pricing debate and may lead to better communication between revenue authorities and their governments.

World Bank

The World Bank formed its global tax simplification programme around two years ago. The programme aims to:

  • Introduce a complete transfer pricing legal framework.

  • Implement detection mechanisms (risk-based auditing indicators) to identify possible TP abuse.

  • Promote capacity building and training which is critical to successful implementation and audits, especially given the complexity of this topic.

The programme is providing transfer pricing assistance in Georgia, Armenia, Bosnia, Serbia, Albania, and Thailand, in partnership with the OECD and EU. The group is working with the local International Finance Corporation offices on these projects, with the exception of Thailand, where the programme is working with the World Bank's office.

The programme has also begun working on advance pricing agreement programmes with certain developing countries, contributing to developing countries' capacity building programmes within their revenue authorities and, consequently, their power to tax companies for their fair share.

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