Raffaele Petruzzi

Michael Lang

Transfer pricing and business restructurings: issues and developments In the ever-evolving global landscape, the ability of businesses to swiftly adapt is crucial for maintaining relevance and competitiveness. This imperative holds true for multinationals, which frequently engage in strategic restructuring of their operations, assets, and resources to realign with the dynamic shifts in market conditions. This dynamic approach enhances operational efficiency, cuts costs, and optimizes financial performance. However, the intricacies of restructuring, especially in the context of transfer pricing, pose considerable challenges. Despite elaborate guidance from the OECD and UN, transfer pricing considerations in business restructuring remain complex. Determining appropriate transfer pricing methodologies, finding comparable transactions, and ensuring accurate documentation present hurdles for both multinationals and tax administrations. This publication discusses the most important issues and recent developments related to this theme. It attempts to cover various issues related to business restructuring, including delineation and recognition, remuneration of restructuring and post-restructuring, and other relevant issues such as exit taxes, location savings, permanent establishments, and implications of COVID-19. This book is based on the outcomes of the presentations and discussions held during the WU Transfer Pricing Symposium, that took place in October 2022 at the WU Vienna University of Economics and Business. The authors, apart from providing a theoretical background to the discussed issues, also present case studies that show how those issues can be approached in practice.

Current Developments, Relevant Issues and Possible Solutions

Transfer Pricing and Business Restructurings

Giammarco Cottani

This is Part Two of a crucially significant two-volume set on the nature of transfer pricing that fully elucidates how the growing body of applicable rules works in practice. The preceding volume, subtitled General Topics and Specific Transactions, focused on basic principles and specialized topics. This volume enlarges the scope of the first volume, particularly concerning industry specifics, regional considerations, the use of new technologies, and the intersection between transfer pricing rules and other disciplines. As in the first volume, stakeholding contributors from government, multinational companies, international organizations, advisory groups, and academia offer deeply informed perspectives, both general and specific, on the practical application of transfer pricing rules. With numerous examples and relevant international judicial precedents, the authors augment the first volume in such ways as the following: extended analysis of particular business sectors, including automotive, banking, consumer goods, insurance, IT, oil and gas, and pharmaceutics; specific jurisdictional coverage of the United States, the European Union, Brazil, China, and India; detailed presentation of the use of new technologies by both taxpayers and tax authorities; and further in-depth analysis of transfer pricing’s interaction with various fields of law. With this authoritative source of practical guidance, advisors, in-house practitioners, government officials, and academics worldwide will have all the details they need to move forward in tackling the complex aspects of the current transfer pricing environment.

Industries, Regions, New Technologies, and Other Topics

Fundamentals of Transfer Pricing

Alfred Storck

Transfer pricing continues to be one of the most significant areas of heightened controversy in international taxation for multinational enterprises and tax administrations. Due to its far-reaching consequences, tax professionals and individual tax jurisdictions are required to understand the fundamentals of the topic, which is often caught in a maze of literature. Emerging from the joint research conducted by the WU Transfer Pricing Center at the Institute for Austrian and International Tax Law at WU (Vienna University of Economics and Business), the international tax law firm L&P – Ludovici Piccone & Partners, and the experiences from the annual advanced transfer pricing courses and conferences, this first edition of the book acts as a manual for understanding transfer pricing principles and their practical application. It provides a balanced approach by first detailing the basics of transfer pricing and second proceeding to specific topics that are highly relevant in today's tax environment. For the purpose of easy understanding, the book is presented in two parts: Part I: General Topics I. Introduction to Transfer Pricing II. Accurate Delineation and Recognition of Actual Transactions: Comparability Analysis III. Transfer Pricing Methods (Part I): Traditional Transaction Methods IV. Transfer Pricing Methods (Part II): Transactional Profit Methods V. Administrative Approaches to Avoiding/Minimizing Transfer Pricing Disputes VI. Administrative Approaches to Resolving Transfer Pricing Disputes VII. Transfer Pricing Documentation: Master File, Country File and Country-by-Country Reporting Part II: Specific Topics VIII. Attribution of Profits to Permanent Establishments IX. Transfer Pricing and Intra-group Services X. Transfer Pricing and Intra-group Financial Transactions XI. Transfer Pricing and Intangibles XII. Transfer Pricing, Supply Chain Management and Business Restructurings XIII. Transfer Pricing and Customs Valuation XIV. Transfer Pricing and EU State Aid In analysing the above topics, the work undertaken by the OECD, UN, EU, World Customs Organization, World Bank, International Monetary Fund and other international organizations is considered. Moreover, the book contains several practical examples, judicial precedents and illustrative explanations to complement the understanding. The book will be a catalyst for immense learning of students and young professionals who are at the introductory stage of understanding the nuances of transfer pricing. Further, the book also caters to tax lawyers, in-house tax counsels and academics working in international organizations, the business community and advisory firms as well as government officials interested in understanding transfer pricing.

A Practical Guide

Karoline Spies

The Major Developments in Tax Policy Steadily increasing globalization as well as the financial and economic crisis have brought major challenges for states in ensuring budgetary consolidation while maintaining sustainable economic growth. These developments have not only influenced political and economic discussions in the 21st century, but also raise new questions on the role of taxation in the economic policy environment. National taxation systems worldwide are subject to significant changes and it is assumed that they will develop in a more co-operative way in the near future. This book aims at identifying the major developments in tax policy in the 21st century on a national as well as on an international level and gives an in-depth analysis of the challenges and risks, but also of the opportunities connected to these developments. Ist covers numerous and discrete issues ranging from challenges in the VAT/GST area, the taxation of the financial sector, the fight against aggressive tax planning, tax abuse and tax evasion, tax integration within the EU, the development of transfer pricing rules, the increasing role of co-operative compliance and good governance and the changing tax policies of developing and newly industrialized countries. The contributions in this book build upon a legal comparison of the national tax systems in the relevant fields, propose tax policy solutions where required and give ideas on how to go forward.

Schriftenreihe IStR Band 86

Tax Policy Challenges in the 21st Century

Romero J.S. Tavares Esq.

Value Creation and its effects on Transfer Pricing and tax law Emerging from the OECD/G20 BEPS Project, a new, somewhat fuzzy notion of Value Creation came to permeate not only Transfer Pricing language but also wider allocation rules and anti-abuse provisions in international tax law. The notion of ‘Value Creation’ reframes the interpretation and application of the Arm’s Length Principle (ALP) that is embedded in Articles 7 and 9 of the OECD Model Convention. This new Value Creation notion and approach assist in understanding key enterprise functions while different industry sectors manifest these concepts in various ways. Situating such notions and this approach within the law of tax treaties and analyzing terms of the OECD Transfer Pricing Guidelines alongside their factual context is the aim of this book. Here, law students address Transfer Pricing and Value Creation in sectors as varied as commodities trade, automotive, consumer products, food and beverages, pharmaceutical and life sciences, telecommunications, and the key topic of value creation in a digitalized economy. Our LL.M. students were required to address issues not explored in legal research and to discuss factual topics relevant for Transfer Pricing. All students focused on topics that are new to the international tax debate that keep evolving and on factual matters that often escape legal research.

Raffaele Petruzzi

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