{"id":433,"date":"2015-04-30T15:29:06","date_gmt":"2015-04-30T15:29:06","guid":{"rendered":"https:\/\/wtpadvisors.com\/tp-blog\/?p=433"},"modified":"2024-02-12T18:05:45","modified_gmt":"2024-02-12T18:05:45","slug":"small-countries-taking-big-bites","status":"publish","type":"post","link":"https:\/\/wtpadvisors.com\/tp-blog\/small-countries-taking-big-bites\/","title":{"rendered":"Small Countries Taking Big Bites"},"content":{"rendered":"<p>By Kash Mansori, WTP Advisors<br \/>\nPosted: April 30, 2015<\/p>\n<p>Even relatively small countries can raise substantial tax and transfer pricing issues for the world\u2019s largest multinationals. Take Denmark, for example. A couple of years ago the Danish tax authorities (\u201cSKAT\u201d) announced that they would be making a significant enforcement push with regard to transfer pricing.\u00a0<a href=\"http:\/\/cphpost.dk\/news14\/business-news14\/skat-is-going-after-multinationals-in-transfer-pricing-cases\/031206.html\">Recently reported statistics<\/a>\u00a0illustrate exactly how significant this enforcement push has been:<\/p>\n<p><em><strong>\u00a0 \u00a0&#8220;SKAT is going after multinationals in transfer pricing cases<\/strong><\/em><\/p>\n<p><em>\u00a0 \u00a0The tax authority SKAT has challenged 76 companies for their tax bill\u00a0<\/em><em>in 2014 to the tune of 20 billion kroner, Jyllands-Posten reports.<\/em><\/p>\n<p><em>\u00a0 \u00a0This continues a war on so called transfer pricing cases (where there has been manipulation of prices between related or controlled companies in a business group), which SKAT has been waging for three years. Companies have been hit with extra tax bills for a value of 59 billion kroner during this period.&#8221;<\/em><\/p>\n<p>Okay, that sort of sounds like a lot, but is it really? For context, consider that Denmark\u2019s GDP in 2014 was approximately DKR 2000 bn. That means that SKAT\u2019s transfer pricing assessments are totaling roughly 1% of GDP per year.<\/p>\n<p>So the answer is yes, that is a lot. According to the\u00a0<a href=\"https:\/\/data.oecd.org\/denmark.htm\">OECD<\/a>\u00a0Danish corporate income taxes totaled 3.28% of GDP in 2013. This implies that the potential exists for corporate tax collections to rise by as much as one-third simply as a result of enhanced transfer pricing enforcement. Or put another way, if an enforcement push in the US were to have similar results, total transfer pricing adjustments made by the IRS would be running close to $200 billion per year.<\/p>\n<p>For multinationals, news like this is a reminder that when it comes to figuring out their international tax and transfer pricing positions, they can\u2019t just worry about how they are doing things in the big economics and assume that their positions in smaller countries will just fall into place. Transfer pricing is a problem that multinationals must address on a global basis, considering its impact in each and every country that they do business in.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Kash Mansori, WTP Advisors Posted: April 30, 2015 Even relatively small countries can raise substantial tax and transfer pricing issues for the world\u2019s largest multinationals. Take Denmark, for example. A couple of years ago the Danish tax authorities (\u201cSKAT\u201d) announced that they would be making a significant enforcement push with regard to transfer pricing.\u00a0Recently [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":499,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-433","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-transfer-pricing"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Small Countries Taking Big Bites -<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wtpadvisors.com\/tp-blog\/small-countries-taking-big-bites\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Small Countries Taking Big Bites -\" \/>\n<meta property=\"og:description\" content=\"By Kash Mansori, WTP Advisors Posted: April 30, 2015 Even relatively small countries can raise substantial tax and transfer pricing issues for the world\u2019s largest multinationals. 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