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Transfer
Transfer
Transfer
Transfer
Transfer
100
What is a cost base markup?
In an arms length transaction an independent enterprise would normally seek to to charge for services in such a way as to generate profit rather than providing the service merely at cost
100
What are low value adding services?
Services with no strategic importance to the value chain
100
What are examples of specific low value adding services?
- Accounting and auditing - Human ressources - Legal services - Activities with regards to tax obligations
100
The mutual agreement procedure (MAP) is described where?
OECD art. 25
100
What does a EUAC guarantee that a MAP does not?
An elemination of double taxation
200
What are the two types of allocation keys?
Accounting-based keys Function/user-based keys
200
What are low value adding services often - economic or commercial benefits?
Economic
200
What should the MNE provider of services apply a profit mark up to?
All costs in the pool with the exception of any pass through costs when determining the arms length charge
200
What is the MAP?
1. Check if the case corresponds to art. 9 2. Present the case to the appropriate authority 3. The authority reviews the case 4. The MAP/EUAC starts
200
What is the deadline in a EUAC?
Three years
300
What is an allocation key?
The basis that is used to allocate costs
300
What are low value adding services in the simplified approach?
Services performed by one member or more of a group on behalf of one or more group member
300
What should the profit markup be?
5% of the relevant cost
300
Where in art. 25 is the MAP described?
pkt. 1 og 2
300
What is the EUAC procedure?
Three years --> - State pre-examines the case - If pre-examination doesn't solve the case, then the process begins - 2-year deadline to settle the case effectively eliminating double taxation - If that fails the advisory board provides a suggestion within 6 months - A second period of 6 months for the states
400
How is invoicing a problem in the arms length principle?
Because of opportunity cost of capital which is forgone revenue
400
What do low value adding intra group services refer to?
The supportive nature of such services which are not part of the core business of the MNE group
400
What are the three drivers behind the transfer pricing disputes?
- Continued global integration of economics - The next few years tax payers and authorities will try to apply the updated guidance which will create disputes - Developing countries will have bigger claims for taxable profit and their administrations will have better skill sets to follow through on audits and sovereign negotiations
400
What does the EUAC deal with?
Transactions within the EU
400
The costs relating to the advisory board in the EUAC is borne by who?
The member state
500
What does the arms length principle require in reference to invoicing?
That both price and behavior is invoiced
500
What are examples of disqualified services?
- Services regarding the MNE groups core business - Research and development - Manufacturing and development - Sales, marketing and distribution - Insurence and reassurance
500
What are the solutions for the disputes?
- Local transfer pricing audits on litigation - Taxed treaty mutual agreement procedures (MAP) - EU arbitration convention based MAP's (EUAC MAP) - Advance pricing arrangements (APA) - MAP roll forward (MAP RF) - Accelerated competant authority procedures (ACAP)
500
What is the EUAC a result of?
OECD art. 25 (udspringer fra denne)
500
If the competent authorities fail to settle the matter, who will look at it?
The advisory commission