Transfer Pricing Economics
News and analysis from the arcane world of transfer pricing
A client recently asked me to explain the “Master File / Local File” (“MF/LF”) system of transfer pricing documentation that is being adopted by an increasing number of countries. So I thought that there was no time like the present to put together a basic overview of this increasingly common format for assembling and organizing an MNE's transfer pricing reports.
The story of Apple Inc. and the European Commission is well known by now. Back in August of 2016 the EU’s Competition Commission announced their ruling that Ireland had given Apple an unfair sweetheart deal allowing it to pay less tax in Ireland than it should, and ordered Ireland to send Apple a €13 bn bill for back taxes and interest during the period 2003-14. For their part, Ireland and Apple both have said that they intend to fight the ruling...
The trickle of countries incorporating Country-by-Country Reporting (“CBCR”) requirements into their tax codes has grown into a steady stream. In the past month upcoming legislative or administrative provisions pertaining to CBCR were announced in Austria, Belgium, Germany, Sweden, Switzerland, and Bermuda, the European Parliament approved new CBCR legislation governing the EU, and it was revealed that China would formally establish its own CBCR requirements later this year. Meanwhile, the IRS is expected to release its own draft CBCR requirements by the end of June...
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