Brazil vs Eli Lilly, April 2018, CARF Case No 1302-002-725F

Category: Arm's Length Principle, Transfer Pricing Methods | Tag: ,
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This case concerns imports from related companies and use of the RPM method.

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Brazil vs Eli Lilly 11 april 2018 CARF Case No 1302-002-725F





Related Guidelines

  1. TPG2022 Chapter II paragraph 2.13This part provides a detailed description of traditional transaction methods that are used to apply the arm’s length principle. These methods are the comparable uncontrolled price method or CUP method, the resale price method, and the cost plus method....
  2. TPG2022 Chapter II paragraph 2.35An appropriate resale price margin is easiest to determine where the reseller does not add substantially to the value of the product. In contrast, it may be more difficult to use the resale price method to arrive at an arm’s length price where,...
  3. TPG2022 Chapter II paragraph 2.38Where the reseller is clearly carrying on a substantial commercial activity in addition to the resale activity itself, then a reasonably substantial resale price margin might be expected. If the reseller in its activities employs certain assets (e.g. intangibles used by the reseller,...
  4. TPG2022 Chapter II paragraph 2.32It may be appropriate to give more weight to other attributes of comparability discussed in Chapter I (i.e. functions performed, economic circumstances, etc.) when the profit margin relates primarily to those other attributes and only secondarily to the particular product being transferred. This...
  5. TPG2022 Chapter II paragraph 2.62This Part provides a discussion of transactional profit methods that may be used to approximate arm’s length conditions where such methods are the most appropriate to the circumstances of the case, see paragraphs 2.1 – 2.12. Transactional profit methods examine the profits that...
  6. TPG2022 Chapter II paragraph 2.33When the resale price margin used is that of an independent enterprise in a comparable transaction, the reliability of the resale price method may be affected if there are material differences in the ways the associated enterprises and independent enterprises carry out their...
  7. TPG2022 Chapter II paragraph 2.30In a market economy, the compensation for performing similar functions would tend to be equalized across different activities. In contrast, prices for different products would tend to equalize only to the extent that those products were substitutes for one another. Because gross profit...
  8. TPG2022 Chapter II paragraph 2.51For this purpose, it is particularly important to consider differences in the level and types of expenses – operating expenses and non- operating expenses including financing expenditures – associated with functions performed and risks assumed by the parties or transactions being compared. Consideration...
  1. 2023: ATO Draft Practical Compliance Guidelines on Intangibles Arrangements, PCG 2023/D2The Australian Taxation Office (ATO) has released a new draft of Compliance Guidelines on Intangible Arrangements, PCG 2023/D2. When finalised, the guidelines will set out the ATO’s compliance approach to the development, use and transfer of intangible assets. The guidelines focus on tax...
  2. New Zealand introduces Group Rating Approach for certain Cross-Border relatet party Borrowing and Debt ArrangementsThe OECD’s final report on interest limitation rules notes that thin capitalisation rules are vulnerable to loans with excessive interest rates and many transfer pricing practitioners finds that transfer pricing may not the most effective way to prevent profit-shifting using high-priced related party...

Related Case Law

  1. Brazil vs DSM Produtos Nutricionais Brasil S.A., October 2021, Federal Regional Court, Case No. 5013244-89.2018.4.03.6100DSM Produtos Nutricionais Brasil S.A. had based the intragroup pricing of imported goods on the “RPL-60 method” which applied in Brazil up until 2012. “Article 18, II of Law 9430/1996, as amended by Law 9. 959/2000, provides that the transfer price, in the...
  2. Spain vs. Zeraim Iberica SA, June 2018, Audiencia Nacional, Case No. ES:AN:2018:2856ZERAIM IBERICA SA, a Spanish subsidiary in the Swiss Syngenta Group (that produces seeds and agrochemicals), had first been issued a tax assessment relating to fiscal years 2006 and 2007 and later another assessment for FY 2008 and 2009 related to the arm’s...
  3. Panama vs “Pharma Distributor S.A.”, July 2021, Administrative Tax Court, Case No TAT-RF-066An adjustment for FY 2013 and 2014 had been issued to a pharmaceutical company in Panama “Pharma Distributor S.A” that resulted in an income adjustment of 19.5 million dollars, which in turn resulted in additional taxes of 2.4 million dollars. The resale price...
  4. Finland vs A Group, December 2018, Supreme Administrative Court, Case No. KHO:2018:173During fiscal years 2006–2008, A-Group had been manufacturing and selling products in the construction industry – insulation and other building components. License fees received by the parent company A OY from the manufacturing companies had been determined by application of the CUP method....