The European Commission’s proposals for taxation of the digital economy has prompted new discussions on whether the arm’s-length principle has a future or if a move towards formulary apportionment could be an option.
Tax experts have criticised the EU’s digital sales tax for being unfair towards digital companies and questioned if a new multilateral instrument is necessary to amend the PE definition in tax treaties to include a significant digital presence.
An increased focus on substance has contributed to companies being less worried about reputational damage from heightened public and media scrutiny of their tax affairs. But it remains a concern for corporates and some prefer to pay more tax to avoid ending up in the spotlight.
In-house tax professionals anticipate a Brazilian OECD membership will solve problems with complex transfer pricing rules and costly disputes with the tax authority. Calculating an arm’s-length price can be a challenge because Brazil’s most commonly-used transfer pricing method, the resale price method or PRL, has fixed margins.
Corporate heads of tax and Philip Green, the former CFO of Deliveroo and Groupon, share their perspectives on why tax and transfer pricing are taking up an increasing amount of C-suite time. With the rollout of BEPS, transfer pricing and controversy management have become crucial for boardrooms.
A recently concluded APA spells good news for importers to India. The agreement paves the way for customs valuations to be accepted as at arm’s length for inter-company transactions.
