TPG2017 Chapter IX paragraph 9.5

Category: A. Scope, OECD Transfer Pricing Guidelines (2017), TPG2017 Chapter IX: Transfer Pricing Aspects of Business Restructurings | Tag:
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This chapter contains a discussion of the transfer pricing aspects of business restructurings, i.e. of the application of Article 9 (Associated Enterprises) of the OECD Model Tax Convention and of these Guidelines to business restructurings.






Related Guidelines

  1. TPG2022 Chapter IX paragraph 9.6Business restructurings are typically accompanied by a reallocation of profit potential among the members of the MNE group, either immediately after the restructuring or over a few years. One major objective of this chapter in relation to Article 9 is to discuss the...
  2. TPG2022 Chapter IX paragraph 9.10A business restructuring may involve cross-border transfers of something of value, e.g. of valuable intangibles, although this is not always the case. It may also or alternatively involve the termination or substantial renegotiation of existing arrangements, e.g. manufacturing arrangements, distribution arrangements, licences, service...
  3. TPG2022 Chapter IX paragraph 9.12The arm’s length principle requires an evaluation of the conditions made or imposed between associated enterprises, at the level of each of them. The fact that a business restructuring may be motivated by sound commercial reasons at the level of the MNE group,...
  4. TPG2022 Chapter IX paragraph 9.35Business restructurings often lead MNE groups to implement global business models that are hardly if ever found between independent enterprises, taking advantage of the very fact that they are MNE groups and that they can work in an integrated fashion. For instance, MNE...
  5. TPG2022 Chapter IX paragraph 9.8Domestic anti-abuse rules and CFC legislation are not within the scope of this chapter. The domestic tax treatment of an arm’s length payment, including rules regarding the deductibility of such a payment and how domestic capital gains tax provisions may apply to an...
  6. TPG2022 Chapter IX paragraph 9.7This chapter only covers transactions between associated enterprises in the context of Article 9 of the OECD Model Tax Convention and does not address the attribution of profits within a single enterprise on the basis of Article 7 of the OECD Model Tax...
  7. TPG2022 Chapter IX paragraph 9.119Another issue with before-and-after comparisons is the likely difficulty of valuing the basket of functions, assets and risks that were lost by the restructured entity, keeping in mind that it is not always the case that these functions, assets and risks are transferred...
  8. TPG2022 Chapter IX paragraph 9.39An independent enterprise does not necessarily receive compensation when a change in its business arrangements results in a reduction in its profit potential or expected future profits. The arm’s length principle does not require compensation for a mere decrease in the expectation of...
  1. Australia finalises compliance guideline on intangibles migration arrangements – PCG 2024/117 January 2024 the Australian Taxation Office published the final version of its Practical Compliance Guideline PCG 2024/1 Intangibles migration arrangements. The PCG has previously been released in drafts as PCG 2021/D4 and PCG 2023/D2 Intangibles arrangements. The final version sets out ATO’s...
  2. A Toolkit on the Taxation of Offshore Indirect TransfersThe Platform for Collaboration on Tax (IMF, OECD, UN and the WBG) has published a toolkit on the taxation of Offshore Indirect Transfers. The tax treatment of ‘offshore indirect transfers’ (OITs) – in essence, the sale of an entity owning an asset located...

Related Case Law

  1. Netherlands vs Restructuring BV, September 2017, Rechtbank ZWB, No BRE 15/5683A Dutch company was engaged in smelting of zinc. The business was then restructured, for which the company received a small compensation payment. Dutch tax authorities disagreed with both the amount of compensation payment and the arm’s-length remuneration of the post restructuring manufacturing activities. Until 2003 the Dutch...
  2. Sweden vs “A Loan AB”, January 2024, Supreme Administrative Court, Case No 4068-23A AB is part of an international group. The group was planning a reorganisation involving a number of intra-group transactions. As part of this reorganisation, A AB would acquire all the shares in B from the group company C. The acquisition would mainly...
  3. Switzerland vs A AG, September 2021, Administrative Court, Case No SB.2020.00011/12 and SB.2020.00014/15A AG, which was founded in 2000 by researchers from the University of Applied Sciences D, has as its object the development and distribution of …, in particular in the areas of ….. It had its registered office in Zurich until the transfer...
  4. Denmark vs H Group, April 2019, Tax Tribunal, Case No. SKM2019.207.LSRIntangibles had been transferred from a Danish subsidiary to a US parent under a written agreement. According to the agreement the Danish subsidiary – which had developed and used it’s own intangibles – would now have to pay royalties for the use of...