USA Law and Practice Contributed by: Kim Marie Boylan, Nicholas Wilkins, Christina Culver and Kiara Williams, White & Case LLP
certain safe harbours, which are discussed in 11. Safe Harbours or Other Unique Rules . Another example is in the context of CSAs, which are pro - vided for in Treasury Regulation Section 1.482-7. The regulation provides specific guidelines and, so long as the entities’ CSA is within the confines of the regulation guidelines, the arrangement will be considered arm’s length. 9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project As mentioned in 9.1 Alignment and Differences , the USA views its Section 482 transfer pricing rules as consistent with the OECD Transfer Pric - ing Guidelines. Tax practitioners are not univer - sally in agreement. Differences in domestic and foreign transfer pricing landscapes are generally resolved in proceedings with the APMA. 9.4 Impact of BEPS 2.0 At the time of publication (April 2025), the USA’s perspective on the OECD’s BEPS 2.0 initiative, including Pillar One and Pillar Two, is in flux. Prior to the administration change in January 2025, BEPS 2.0 was supported by President Biden’s administration, but not Congress. Cur - rently, neither President Trump’s administration nor Congress support BEPS 2.0. Shortly after taking office, the Trump administration issued a statement that the OECD global tax deal has “no force or effect within the United States absent an act by the Congress adopting the relevant pro- visions of the Global Tax Deal” . The long-term impact of BEPS 2.0 in the USA remains to be seen. 9.5 Entities Bearing the Risk of Another Entity’s Operations One entity in an intercompany transaction can bear the risk of another related entity’s opera - tions by guaranteeing the other entity a return, so long as the entity bearing the risk is com -
pensated appropriately for that risk. Provided there is economic substance in the underlying transactions, the IRS will respect contractual risk allocation. 10. Relevance of the United Nations Practical Manual on Transfer Pricing 10.1 Impact of UN Practical Manual on Transfer Pricing The United Nations Practical Manual on Transfer Pricing does not significantly impact US transfer pricing practice or enforcement. Transfer pric - ing laws in the USA are derived from the Code – specifically, Section 482 – and the regulations promulgated thereunder, IRS administrative guidance (eg, revenue rulings and revenue pro - cedures), and case law. 11. Safe Harbours or Other Unique Rules 11.1 Transfer Pricing Safe Harbours US transfer pricing rules contain a few safe har - bours applicable in certain specific situations. For instance, Treasury Regulation Section 1.482- 2(a)(2)(iii) contains “safe haven interest rate” for certain loans and advances between members of a group of controlled entities, so long as the rate is not less than 100% of the applicable fed - eral rate and not more than 130% of the appli - cable federal rate. There is also a safe harbour for certain low value-adding intra-group services in Treasury Regulation Section 1.482-9(b). This safe har - bour provides for the SCM (see 3.1 Transfer Pricing Methods ) – under which, low value- adding intra-group service scan be charged out
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