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in association with:
Welcome to TRANSFER PRICING
Prof Dr Daniel N Erasmus, EA & USTCP, International Tax Attorney TRM Daniel Erasmus Tax Court Practitioners
Welcome to TRANSFER PRICING Prof Dr Daniel N Erasmus, EA & - - PowerPoint PPT Presentation
Welcome to TRANSFER PRICING Prof Dr Daniel N Erasmus, EA & - - PowerPoint PPT Presentation
in association with: Welcome to TRANSFER PRICING Prof Dr Daniel N Erasmus, EA & USTCP, International Tax Attorney TRM Daniel Erasmus Tax Court Practitioners Prof Dr Daniel N Erasmus, EA, USTCP & Intl Tax Attorney +1 561 568 7115
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What does TP typically apply to?
} Cross-border transactions } Domestic transactions sometimes eg. Nigeria } Between “associated enterprises” or “connected
persons”
} Incl:
} HO & Branches } HO & Permanent Establishments
} THEN “arm’s length” standard or test applies:
} Is there an obligation? } Is there a discretion?
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- A. BACKGROUND LEGAL SYSTEMS
} Victor Thuronyi } Comparative Tax Law in CAMPUS } Page 23 different legal systems } Page 43 country by country
Prof Dr Daniel N Erasmus, EA & USTCP +1 561 568 7115
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- B. CASE LAW ONLINE
Ø Kenya Unilever transfer pricing case (Africa) Ø www.commonlii.org Ø www.law.cornell.edu Ø USA IRS site Ø www.saflii.org Ø www.africalii.org Ø www.worldlii.org Ø www.chinalii.net Ø China transfer pricing Ø PWC International Transfer Pricing 2015/2016
Prof Dr Daniel N Erasmus, EA & USTCP +1 561 568 7115
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- C. DOUBLE TAX TREATIES or
AGREEMENTS between TP affected States
Prof Dr Daniel N Erasmus, EA & USTCP 561 568 7115
} OECD Model Tax Convention 2010
} Article 5 Permanent Establishments } Article 7 Taxation of Business Profits } Article 9 Taxation of Associated Enterprises } Article 24 Eliminate tax discrimination – see WTO
& BIT
} Article 25 MAP } Article 26 The Exchange of Information
} BEPS Action 15 Multilateral Instrument
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- D. OECD TRANSFER PRICING
GUIDELINES & UN PRAC TP MANUAL
Prof Dr Daniel N Erasmus, EA & USTCP 561 568 7115
Ø Soft Law Ø OECD TP GUIDELINES Ø Beps actions Ø Actions 8 – 10 on Transfer Pricing Ø Action 13 Transfer Pricing Documentation Ø 2017 United Nations Practical Manual on TP for Developing Countries (most States are members)
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- E. LEGISLATION – in country
Prof Dr Daniel N Erasmus, EA & USTCP 561 568 7115
Ø Specific Transfer Pricing provision Ø General anti-avoidance provisions Ø “associated enterprise” definition – domestic law Ø “arm’s length” definition – soft law Ø TP affects: Ø Goods Ø Services Ø Intangible Assets Ø Financial transactions like loans
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- F. OTHER RELEVANT TREATIES &
LEGISLATION
Prof Dr Daniel N Erasmus, EA & USTCP 561 568 7115
Ø Constitution (eg. SA)
Ø administrative action
Ø lawfulness, reasonableness & fairness Ø influence of foreign law Ø status of international treaties (DTA’s) Ø Are Transfer Pricing provisions constitutional?
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- F. OTHER RELEVANT TREATIES &
LEGISLATION continued
Prof Dr Daniel N Erasmus, EA & USTCP 561 568 7115
Ø Administrative Law (eg. SA & PAJA)
Ø eg. Promotion of Administrative Justice
Act, 2000 Ø fair notice of administrative action
Ø audi alteram partem rule Ø proper reasons for administrative action Ø remedies Ø internal processes Ø s 6 of PAJA eg. of transgressions Ø Administrative CHAPTER IV in OECD Guidelines
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- F. OTHER RELEVANT TREATIES &
LEGISLATION continued
Prof Dr Daniel N Erasmus, EA & USTCP 561 568 7115
Ø Vienna Convention signatories
Ø international customary law created by DTA’s Ø internal law cannot be used to justify failure to perform a treaty (Article 27)
Ø Bilateral Investment Treaties
Ø not less favourable treatment Ø Mauritius/South Africa BIT Ø country level fight
Ø WTO (GATT & GATS) Ø more favourable treatment
Ø country level fight
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- G. CASE STUDY
Prof Dr Daniel N Erasmus, EA & USTCP 561 568 7115
Ø Pick another country your company does business with
Ø Find the Constitution and any administrative law provisions Ø Find any Administrative Law legislation Ø Find any Transfer Pricing related case law (leading cases by highest courts) Ø Find Transfer Pricing provisions in the Income Tax Act Ø Find Anti- Tax Avoidance provisions in the Income Tax Act Ø Browse Deloitte Country Summaries Ø Peer review
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