§ 1.482-9(l)(3) Benefit –
Category: (l) Controlled services transaction, Transfer Pricing Guidelines, US IRC Section 482 on Transfer Pricing, § 1.482-9 Methods to determine taxable income in connection with a controlled services transaction | Tag: Benefit test, Intra-group services, Services
« Prev |
Next » Related Guidelines
- TPG2022 Chapter VII paragraph 7.55While low value-adding intra-group services may provide benefits to all recipients of those services, questions may arise about the extent of the benefits and whether independent parties would have been willing to pay for the service or perform it themselves. Where the MNE...
- TPG2022 Chapter VII paragraph 7.54As discussed in paragraph 7.6, under the arm’s length principle an obligation to pay for an intra-group service arises only where the benefits test is satisfied, i.e. the activity must provide the group member expected to pay for the service with economic or...
- TPG2022 Chapter VII paragraph 7.32It may be necessary to perform a functional analysis of the various members of the group to establish the relationship between the relevant services and the members’ activities and performance. In addition, it may be necessary to consider not only the immediate impact...
- TPG2022 Chapter VII paragraph 7.17These services may be available on call and they may vary in amount and importance from year to year. It is unlikely that an independent enterprise would incur stand-by charges where the potential need for the service was remote, where the advantage of...
- TPG2022 Chapter VII paragraph 7.11In general, no intra-group service should be found for activities undertaken by one group member that merely duplicate a service that another group member is performing for itself, or that is being performed for such other group member by a third party. An...
- TPG2022 Chapter VII paragraph 7.8Some intra-group services are performed by one member of an MNE group to meet an identified need of one or more specific members of the group. In such a case, it is relatively straightforward to determine whether a service has been provided. Ordinarily...
- TPG2022 Chapter VII paragraph 7.7The analysis described above quite clearly depends on the actual facts and circumstances, and it is not possible in the abstract to set forth categorically the activities that do or do not constitute the rendering of intra-group services. However, some guidance may be...
- TPG2022 Chapter VII paragraph 7.6Under the arm’s length principle, the question whether an intra-group service has been rendered when an activity is performed for one or more group members by another group member should depend on whether the activity provides a respective group member with economic or...
Related Case Law
- Romania vs “Stone” A SRL, July 2020, Supreme Court, Case No 3217/2020“Stone” A SRL had bought stones/minerals from related parties and paid for certain services. Following an audit the tax authorities had issued an assessment, where the price paid for stones had been adjusted based on cost plus method and deductions for costs of...
- Czech Republic vs STOCK Plzeň-Božkov, s. r. o., May 2023, Supreme Administrative Court, Case No 10 Afs 93/2021 – 69STOCK Plzeň-Božkov, s. r. o. had deducted costs for production consultancy services, financial services and internal support services allegedly received from related parties. The tax authorities disallowed deduction of the costs for tax purposes on the basis that the evidence provided by STOCK...
- Italy vs Rohm and Haas Italia s.r.l, February 2020, Supreme Court, Case No 3599 13/02/2020At issue was deduction of VAT on purported costs incurred for intra-group services. Cost allocated to Rohm and Hass under a cost sharing agreement had been deemed non-deductible for VAT purposes by the Italien Tax Authorities, as the taxpayer had not been able...
- Colombia vs Bavaria S.A., June 2023, Supreme Administrative Court, Case No. 25000-23-37-000-2017-00654-01 (25885)Bavaria S.A. is part of the SABMiller group – a multinational brewing and beverage group – and in FY2013 the company had deducted costs related to various intra-group transactions – licences, cost of sales, procurement services, administrative services, technical support, other expenses (reimbursements...