Framework for Transfer Pricing Analysis Under Treasury Regulation Section 1.482 and the OECD Guidelines
Posted by William Byrnes on July 12, 2016
Section 482’s purpose is to ensure that taxpayers subject to U.S. taxation “clearly reflect income” related to transactions with other organizations that are under common ownership or control with the taxpayer, and “to prevent the avoidance of taxes with respect to such transactions.” The desired result is “tax parity” between the “controlled taxpayer” and an “uncontrolled taxpayer,” and, thereby, to determine the “true taxable income” of the controlled taxpayer. Similarly, the 2010 Guidelines state that the arm’s length standard which flows from recognizing the separate entity status of related entities in different jurisdictions has the dual objective of securing an appropriate tax base in each jurisdiction and avoiding double taxation.
Since many U.S. trading partners follow the OECD Guidelines (and to a certain extent the United States also does) similarities and differences between the OECD Guidelines and the U.S. regulations are important.
Number of Pages in PDF File: 93
Framework for Transfer Pricing Analysis Under Treasury Regulation Section 1.482 and the OECD Guidelines (July 5, 2016). William Byrnes & Robert Cole (deceased), Practical Guide to U.S. Transfer Pricing § 2.01 – § 2.19 (Matthew Bender, Third Edition). Available at SSRN: http://ssrn.com/abstract=2805279