These issues arise primarily from the practical difficulty, for both MNEs and tax administrations, of determining the income and expenses of a company or a permanent establishment that is part of an MNE group that should be taken into account within a jurisdiction, particularly where the MNE group’s operations are highly integrated.
Related content:
- Preface paragraph 4
In the case of tax administrations, specific problems arise at both policy and practical levels. At the policy level, countries need to reconcile their legitimate right to tax the profits...
- Preface paragraph 12
Transfer prices are significant for both taxpayers and tax administrations because they determine in large part the income and expenses, and therefore taxable profits, of associated enterprises in different tax...
- Chapter IV paragraph 4.142
Tax administrations may find APAs particularly useful in profit allocation or income attribution issues arising in the context of global securities and commodity trading operations, and also in handling multilateral...
- Preface paragraph 11
In applying the foregoing principles to the taxation of MNEs, one of the most difficult issues that has arisen is the establishment for tax purposes of appropriate transfer prices. Transfer...
- Preface paragraph 1
The role of multinational enterprises (MNEs) in world trade has continued to increase dramatically since the adoption of these Guidelines in 1995. This in part reflects the increased pace of...
- Switzerland vs. Finanz AG, Oct. 2012, Federal Supreme Court, Case No 2C_708/2011
A company of a Swiss based group maintained a permanent establishment in the Cayman Islands for financing the domestic group companies. Whereas the group companies were able to deduct the...
- Article 7
BUSINESS PROFITS 1. Profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through...
- Chapter IV paragraph 4.157
The disclosure and information aspects of an APA programme as well as the cooperative attitude under which an APA can be negotiated may assist tax administrations in gaining insight into...
- Preface paragraph 5
At a primary level, the taxing rights that each country asserts depend on whether the country uses a system of taxation that is residence-based, source-based, or both. In a residence-based...
- Chapter I paragraph 1.139
Paragraphs 1.110, 1.112 and 6.120 indicate that features of the geographic market in which business operations occur can affect comparability and arm’s length prices. Difficult issues can arise in evaluating...