Simple Transfer Pricing Agreement

8. Oktober 2021 Aus Von ROCT

B.1.1.1. This introductory chapter provides a brief overview of transfer pricing and deals with practical issues and concerns, in particular the problems and approaches of developing countries. These will then be discussed in more detail in future chapters. B.1.10.8. Transfer pricing methods are complex and time-consuming and often require time and attention from some of the most skilled and valuable human resources, both in MNEs and in tax administrations. Transfer pricing reports often consist of hundreds of pages, with many legal and accounting experts employed to produce them. This type of complexity and need for knowledge represents a huge burden for both tax authorities and taxpayers, especially in developing countries where resources tend to be limited and where the corresponding training is not readily available in such a specialized field. However, their transfer pricing rules have helped some developing countries to build the necessary capacity and capacity while protecting their tax base. B.1.7.9. Another important issue for the implementation of national legislation is the transfer pricing documentation requirement.

Tax authorities need a large number of commercial documents that support the application of the doe-first principle by certain taxable persons. However, there are some differences in the legislation as regards the nature of the documents required, the penalties imposed and the degree of competence of auditors to collect information when taxpayers do not submit such documents. The question also arises as to whether the documentation should be „at the same time“, as mentioned above. Assuming that a Corporation P (parent company) manufactures car seats in country A, and then sells the finished seats to its subsidiary S in country B, which, in turn, sells those finished seats in country B to independent parties (for example. B the general public). In this case, S`s taxable profits are determined by the selling price of the seats to the independent parties, less the price at which the seats were obtained from their parent company (cost of goods sold in S`s accounts, in this case the transfer price) and its expenses other than those of the goods sold. Most countries have transfer pricing rules in their national tax legislation. In short, these rules provide that the conditions applicable to controlled transactions must not differ from those that would apply to uncontrolled transactions (remember: transactions between independent companies). . . .