MIAMI TP CONFERENCE: OBSERVATIONS AT THE TP MINDS TRANSFER PRICING SUMMIT 2015 HELD IN MIAMI ON 24/25 FEBRUARY 2015

MIAMI TP CONFERENCE: OBSERVATIONS AT THE TP MINDS TRANSFER PRICINGTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... SUMMIT 2015 HELD IN MIAMI ON 24/25 FEBRUARY 2015

The main theme of the Transfer PricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... Conference was a look at the impact BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... has on the transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... environment.

Specific areas that are notable and that were focused on were –

• Action 8 on Transfer PricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... and Intangibles.
• Action 13 on Transfer PricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... Documentation; and
• Action 14 on Dispute Resolution.

By way of general introductory comment it is notable that many of the speakers took the same view that BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... will most definitely result in a higher level of exchange of information between governments, which will not necessarily be controlled, and may give rise to confidentiality breaches and stimulate certain governments to utilise that information not so much to ensure that proper transfer pricing adjustmentsTransfer Pricing Adjustments are modifications made to the pricing of transactions between related entities within a multinational enterprise (MNE) by tax authorities or the MNE itself. These adjustments are carried out to ensure compliance with the arm’s length principle, which stipulates that prices for intercompany transactions should reflect what independent parties would have agreed upon under similar circumstances. The arm’s... take place, but to give those governments opportunities to raise more taxes. In this regard, the general view is that this is going to result in a significant increase in audits and disputes. The tax disputesTax Disputes arise when there is a disagreement between taxpayers and tax authorities regarding the interpretation or application of tax laws. These disputes may concern various issues such as the accuracy of a tax return, the eligibility for tax deductions or credits, the correct amount of tax liability, or transfer pricing adjustments. Tax disputes can lead to lengthy legal proceedings... in turn will lead to a record number of mutual agreement procedures being initiated.

According to OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... information the current number of MAPs exceeds 1,910 (with another 25 partner economy MAPs). It is notable that 6 MAPs are ascribed to South Africa. www.TaxRiskManagement.com are advisors in a recent transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... dispute on behalf of a multi-national where an additional 8 MAPs will be filed, which will take the number of MAPs in South Africa from 6 to 14.

It is also a general observation that emerging economies (such as in Africa) are not well experienced or educated in transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... principles. In this regard, it is absolutely necessary that time and effort be spent on educating these tax authorities in respect of the applicable transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... principles. What is concerning is that various BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... action plans are already being implemented (the BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... documentation currently being circulated is still in draft form) by various emerging market tax authorities. These tax authorities are using the DRAFT BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... action reports to drive more tax collections.

On the dispute resolution side, much emphasis was placed on the Last Best Offer (LBO) arbitration methodology in conjunction with BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... Action Plan 13 for arbitration particularly where a MAP procedure turns out to be unsuccessful. The LBO arbitration process compels the arbitrator to choose one of the disputing parties’ last offer in the arbitration, based on the strength of the arguments put forward by the winner (with the best LBO). Whichever opponent has an argument that leans closer to the midway mark between the 2 offers, will be the winning offer in the arbitration. There is much speculation whether this process will find favour with many of the countries – so it remains an uncertain solution.

It is clear that with country by country reporting being introduced, other than the issues surrounding the sharing of information of various governments, a lot more time and effort will have to go into the preparation of transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... documentation and a move away from generalised TP reports simply to provide protection from penalties being imposed by Revenue Authorities. The approach to transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... documentation is going to have to be a lot more strategic and thorough especially in the light of the fact that it is anticipated that information will be shared between governments testing the veracity of that which is being set out in TP reports.

Prof. Dr. D. N. Erasmus Esq. PhD Adv Dip TP

daniel@taxriskmanagement.com