Enforcement is the name of the transfer pricing game in Asia right now. After going to much trouble to institute their own transfer pricing rules, jurisdictions in the region have set about ensuring that those rules are being adhered to. In countries, such as Australia, which have had rules for a little longer, the tax authorities continue to refine their enforcement techniques, including litigation, in an attempt to get taxpayers to pay their fair share of tax from related-party transactions.
It is in this context that International Tax Review co-publishes its Asia Transfer Pricing guide with leading tax advisers: Baker & McKenzie, Ernst & Young, Kim & Chang, KPMG and PricewaterhouseCoopers. The guide is the 25th in the Tax Reference Library series, which has also covered other topics such as intellectual property, e-commerce and outsourcing. They are designed to give in-house tax counsel the most cutting-edge advice for planning their corporation's tax strategy and structuring transactions in these fields. More are on the way.
PricewaterhouseCoopers details how the Australian Taxation Office is planning to litigate its first substantive transfer pricing cases in 2005 and 2006.
Baker & McKenzie refers to how the Chinese tax authorities enforce the rules there, including how they choose taxpayers for a transfer pricing audit.
KPMG in Hong Kong looks at the treatment by the tax authorities of the allocation of head-office expenses to Hong Kong branches and subsidiaries.
Transfer pricing audits have just begun in India. Ernst & Young comments on how the first year went.
The Japanese tax authorities continue to develop their transfer pricing rules so that they are more comprehensible to taxpayers and follow international best practice, according to Shin Nihon Ernst & Young.
Kim & Chang discusses the methods the tax authorities in Korea use to assess a related-party transaction.
The Inland Revenue Authority in Singapore has used parts of the income tax legislation to scrutinize related-party transactions, reveals KPMG.
Taiwan has only had transfer pricing rules since the end of 2004. Companies have a lot to get used to, says KPMG.
Thailand has had transfer pricing guidelines since 2002. KPMG analyzes how they are being enforced.
We hope the insights these specialist tax advisers offer in International Tax Review's Asia Transfer Pricing guide provide you with some valuable knowledge for dealing with the issue in the region.
Ralph Cunningham
Managing editor, International Tax Review
