Any contemporary guide to tax is unable to avoid the increasing importance of ESG issues, and ITR’s Transfer Pricing Guide 2023 is no exception. Skeppsbron Skatt explores the link between tax and sustainability for multinational entities. The compilation of metrics in ESG reporting may be administratively burdensome, but there is also an opportunity for organisations to earn a valuable reputation as ‘green leaders’.
Arendt & Medernach considers the ramifications of the European Court of Justice’s decision in the Fiat state aid case, which was delivered after almost 10 years of litigation. The ruling pushes back on the European Commission’s attempt to interfere in tax matters through state aid investigations, as well as the idea of a harmonised EU arm’s length principle on top of the commonly accepted OECD guidance in this regard.
The acceptance of the OECD’s arm’s length principle as a standardised approach is also a key component of Chevez Ruiz Zamarripa’s analysis of the 2022 reform of the Mexican Income Tax Law. The authors emphasise the importance of maquila companies being prepared for the new safe harbour methodology to mitigate the impact on their taxable profit.
With M&A activity expected to increase in Poland in 2023, Sołtysiński Kawecki & Szlęzak notes a growing interest in the transfer pricing aspects of transactions. The article steps through the stages of M&A processes – including due diligence, pre-closing preparation, and post-closing integration – with an eye on the participants’ considerations in terms of transfer pricing documentation preparation and reporting.
Tax authorities are increasingly concerned that tax base erosion can be attained by multinational enterprises shifting profit through cross-border transactions involving the transfer and licensing of intangibles. The authors from Tax Partner share their practical experience regarding intercompany trademark royalty fees and analyse a recent Swiss Supreme Court case that is of relevance.
Experts from Deloitte explain why digitalisation has become an indispensable tool for tax leaders in the face of increasing compliance requirements and a global push for tax transparency. Technology can help to minimise risks and formulate strategy through the collation and analysis of data as part of the operational transfer pricing provision.
The importance of robust transfer pricing information and planning is also emphasised by GNV Consulting Services, which provides an Indonesian perspective on the constantly changing transfer pricing audit environment. The authors note that transfer pricing is increasingly the subject of tax controversies and consider the domestic and international remedies for taxpayers as the stakes are raised.
Staying in Indonesia, DDTC Consulting reports on the government’s attempt to strengthen its transfer pricing regime through a regulatory update. The move brings Indonesia into closer alignment with the OECD’s BEPS project, with the intention of providing legal certainty, simplification, and ease of tax administration.
The article from Jáuregui y Del Valle also reports on a jurisdiction adapting its transfer pricing rules to bring them closer in line with OECD standards, in Brazil. The author explains why the country’s tax policy has been overhauled and notes the challenges and changes involved.
The alignment of, and conflict between, local regulations and international transfer pricing practices such as those set forth by the OECD is a key theme in the guide and national governments and the interpretation of courts will dictate how the pieces land in attempting to arrive at a clearer picture.
Click here to read all the articles from ITR’s Transfer Pricing Guide 2023.
