When many people have difficulty even defining what Cloud computing is, for a taxpayer in a multinational company, being able to account for the business’s use of Cloud computing for tax purposes can be a nightmare, particularly because of a lack of sufficient guidance on the issue.
The EU’s Joint Transfer Pricing Forum (JTPF) has published a report on compensating adjustments, designed to bring more guidance for taxpayers, particularly those operating in European member states. But members of the forum, including taxpayers and advisers, have said the positions held by some member states have prevented the forum from providing a workable solution.
The Canada Revenue Agency (CRA) saw pharmaceutical company McKesson’s arguments dismissed by the Tax Court in December 2013 but the company has now filed its arguments with the Federal Court of Appeal.
The Tax Court of Canada favoured the Canada Revenue Agency's arguments just before Christmas in a case concerning a receivable sales agreement between the McKesson Canada and its parent company in Luxembourg. But the loser is refusing to take ‘no’ for an answer.
India wants the OECD and the UN to consider the issue of capital receipts. The Ministry of Finance would like to see a more international acceptance of the recharacterisation of capital transactions as loans where interest income can be taxed.
It is increasingly difficult for transfer pricing to be applied generally to industry. Different trades require different approaches and practices from their transfer pricing operations and advisers and governments need to keep up with this trend.
