i Table of contents 415

Transfer Pricing 2025

Definitive global law guides offering comparative analysis from top-ranked lawyers

INTRODUCTION		6
Contributed by Paolo Ludovici, Marlinda Gianfrate, Luca Tortorella and Angelica Masciulli, Gatti Pavesi Bianchi Ludovici		6
AUSTRALIA		13
Law and Practice		13
Contributed by King & Wood Mallesons		13
Trends and Developments		23
Contributed by King & Wood Mallesons		23
AUSTRIA		28
Law and Practice		28
Contributed by Grant Thornton Austria		28
Trends and Developments		44
Contributed by Grant Thornton Austria		44
BELGIUM		51
Law and Practice		51
Contributed by Loyens & Loeff		51
Trends and Developments		75
Contributed by Loyens & Loeff		75
BRAZIL		83
Law and Practice		83
Contributed by William Freire Advogados		83
Trends and Developments		109
Contributed by Machado Meyer Advogados		109
CYPRUS		118
Law and Practice		118
Contributed by Kinanis LLC		118
Trends and Developments		132
Contributed by Kinanis LLC		132
FRANCE		138
Law and Practice		138
Contributed by Baker McKenzie		138
Trends and Developments		160
Contributed by Baker McKenzie		160
INDIA		166
Law and Practice		166
Contributed by AZB & Partners		166
Trends and Developments		189
Contributed by BMR Legal		189
ITALY		199
Law and Practice		199
Contributed by Maisto e Associati		199
Trends and Developments		223
Contributed by Gatti Pavesi Bianchi Ludovici		223
LUXEMBOURG		231
Law and Practice		231
Contributed by ATOZ Tax Advisers		231
Trends and Developments		251
Contributed by Loyens & Loeff		251
NETHERLANDS		260
Law and Practice		260
Contributed by Borgen Tax		260
Trends and Developments		280
Contributed by Loyens & Loeff		280
PERU		290
Law and Practice		290
Contributed by +Value		290
SOUTH KOREA		310
Law and Practice		310
Contributed by Lee & Ko		310
Trends and Developments		334
Contributed by Yoon & Yang LLC		334
SWITZERLAND		341
Law and Practice		341
Contributed by Tax Partner AG		341
Trends and Developments		366
Contributed by Tax Partner AG		366
USA		372
Law and Practice		372
Contributed by White & Case LLP		372
Trends and Developments		387
Contributed by White & Case LLP		387
ZAMBIA		396
Law and Practice		396
Contributed by Mulenga Mundashi Legal Practitioners		396
Trends and Developments		412
Contributed by Mulenga Mundashi Legal Practitioners		412
1. Rules Governing Transfer Pricing		17
1.1 Statutes and Regulations		17
1.2 Current Regime and Recent Changes		17
2. Definition of Control/Related Parties		17
2.1 Application of Transfer Pricing Rules		17
3. Methods and Method Selection and Application		17
3.1 Transfer Pricing Methods		17
3.2 Unspecified Methods		18
3.3 Hierarchy of Methods		18
3.4 Ranges and Statistical Measures		18
3.5 Comparability Adjustments		18
4. Intangibles		18
4.1 Notable Rules		18
4.2 Hard-to-Value Intangibles		18
4.3 Cost Sharing/Cost Contribution Arrangements		18
5. Adjustments		18
5.1 Upward Transfer Pricing Adjustments		18
5.2 Secondary Transfer Pricing Adjustments		18
6. Cross-Border Information Sharing		19
6.1 Sharing Taxpayer Information		19
6.2 Joint Audits		19
7. Advance Pricing Agreements (APAs)		19
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		19
7.2 Administration of Programmes		19
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		19
7.4 Limits on Taxpayers/Transactions Eligible for an APA		19
7.5 APA Application Deadlines		19
7.6 APA User Fees		19
7.7 Duration of APA Cover		19
7.8 Retroactive Effect for APAs		19
8. Penalties and Documentation		19
8.1 Transfer Pricing Penalties and Defences		19
8.2 Transfer Pricing Documentation		20
9. Alignment With OECD Transfer Pricing Guidelines		20
9.1 Alignment and Differences		20
9.2 Arm’s Length Principle		20
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		20
9.4 Impact of BEPS 2.0		20
9.5 Entities Bearing the Risk of Another Entity’s Operations		20
10. Relevance of the United Nations Practical Manual on Transfer Pricing		20
10.1 Impact of UN Practical Manual on Transfer Pricing		20
11. Safe Harbours or Other Unique Rules		20
11.1 Transfer Pricing Safe Harbours		20
11.2 Rules on Savings Arising From Operating in the Jurisdiction		20
11.3 Unique Transfer Pricing Rules or Practices		20
11.4 Financial Transactions		20
12. Co-Ordination With Customs Valuation		21
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		21
13. Controversy Process		21
13.1 Options and Requirements in Transfer Pricing Controversies		21
14. Judicial Precedent		21
14.1 Judicial Precedent on Transfer Pricing		21
14.2 Significant Court Rulings		21
15. Foreign Payment Restrictions		22
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		22
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		22
15.3 Effects of Other Countries’ Legal Restrictions		22
16. Transparency and Confidentiality		22
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		22
16.2 Use of “Secret Comparables”		22
1. Rules Governing Transfer Pricing		32
1.1 Statutes and Regulations		32
1.2 Current Regime and Recent Changes		32
2. Definition of Control/Related Parties		32
2.1 Application of Transfer Pricing Rules		32
3. Methods and Method Selection and Application		33
3.1 Transfer Pricing Methods		33
3.2 Unspecified Methods		33
3.3 Hierarchy of Methods		33
3.4 Ranges and Statistical Measures		33
3.5 Comparability Adjustments		33
4. Intangibles		34
4.1 Notable Rules		34
4.2 Hard-to-Value Intangibles		34
4.3 Cost Sharing/Cost Contribution Arrangements		34
5. Adjustments		34
5.1 Upward Transfer Pricing Adjustments		34
5.2 Secondary Transfer Pricing Adjustments		34
6. Cross-Border Information Sharing		35
6.1 Sharing Taxpayer Information		35
6.2 Joint Audits		35
7. Advance Pricing Agreements (APAs)		36
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		36
7.2 Administration of Programmes		36
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		36
7.4 Limits on Taxpayers/Transactions Eligible for an APA		36
7.5 APA Application Deadlines		37
7.6 APA User Fees		37
7.7 Duration of APA Cover		37
7.8 Retroactive Effect for APAs		37
8. Penalties and Documentation		38
8.1 Transfer Pricing Penalties and Defences		38
8.2 Transfer Pricing Documentation		38
9. Alignment With OECD Transfer Pricing Guidelines		39
9.1 Alignment and Differences		39
9.2 Arm’s Length Principle		39
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		39
9.4 Impact of BEPS 2.0		39
9.5 Entities Bearing the Risk of Another Entity’s Operations		39
10. Relevance of the United Nations Practical Manual on Transfer Pricing		40
10.1 Impact of UN Practical Manual on Transfer Pricing		40
11. Safe Harbours or Other Unique Rules		40
11.1 Transfer Pricing Safe Harbours		40
11.2 Rules on Savings Arising From Operating in the Jurisdiction		40
11.3 Unique Transfer Pricing Rules or Practices		40
11.4 Financial Transactions		40
12. Co-Ordination With Customs Valuation		40
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		40
13. Controversy Process		40
13.1 Options and Requirements in Transfer Pricing Controversies		40
14. Judicial Precedent		41
14.1 Judicial Precedent on Transfer Pricing		41
14.2 Significant Court Rulings		41
15. Foreign Payment Restrictions		43
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		43
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		43
15.3 Effects of Other Countries’ Legal Restrictions		43
16. Transparency and Confidentiality		43
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		43
16.2 Use of “Secret Comparables”		43
1. Rules Governing Transfer Pricing		55
1.1 Statutes and Regulations		55
1.2 Current Regime and Recent Changes		56
2. Definition of Control/Related Parties		56
2.1 Application of Transfer Pricing Rules		56
3. Methods and Method Selection and Application		57
3.1 Transfer Pricing Methods		57
3.2 Unspecified Methods		57
3.3 Hierarchy of Methods		57
3.4 Ranges and Statistical Measures		58
3.5 Comparability Adjustments		58
4. Intangibles		58
4.1 Notable Rules		58
4.2 Hard-to-Value Intangibles		59
4.3 Cost Sharing/Cost Contribution Arrangements		59
5. Adjustments		59
5.1 Upward Transfer Pricing Adjustments		59
5.2 Secondary Transfer Pricing Adjustments		60
6. Cross-Border Information Sharing		60
6.1 Sharing Taxpayer Information		60
6.2 Joint Audits		60
7. Advance Pricing Agreements (APAs)		61
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		61
7.2 Administration of Programmes		62
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		63
7.4 Limits on Taxpayers/Transactions Eligible for an APA		63
7.5 APA Application Deadlines		63
7.6 APA User Fees		64
7.7 Duration of APA Cover		64
7.8 Retroactive Effect for APAs		64
8. Penalties and Documentation		64
8.1 Transfer Pricing Penalties and Defences		64
8.2 Transfer Pricing Documentation		65
9. Alignment With OECD Transfer Pricing Guidelines		66
9.1 Alignment and Differences		66
9.2 Arm’s Length Principle		66
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		67
9.4 Impact of BEPS 2.0		67
9.5 Entities Bearing the Risk of Another Entity’s Operations		67
10. Relevance of the United Nations Practical Manual on Transfer Pricing		68
10.1 Impact of UN Practical Manual on Transfer Pricing		68
11. Safe Harbours or Other Unique Rules		68
11.1 Transfer Pricing Safe Harbours		68
11.2 Rules on Savings Arising From Operating in the Jurisdiction		68
11.3 Unique Transfer Pricing Rules or Practices		68
11.4 Financial Transactions		69
12. Co-Ordination With Customs Valuation		70
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		70
13. Controversy Process		70
13.1 Options and Requirements in Transfer Pricing Controversies		70
14. Judicial Precedent		71
14.1 Judicial Precedent on Transfer Pricing		71
14.2 Significant Court Rulings		72
15. Foreign Payment Restrictions		73
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		73
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		74
15.3 Effects of Other Countries’ Legal Restrictions		74
16. Transparency and Confidentiality		74
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		74
16.2 Use of “Secret Comparables”		74
1. Rules Governing Transfer Pricing		86
1.1 Statutes and Regulations		86
1.2 Current Regime and Recent Changes		86
2. Definition of Control/Related Parties		88
2.1 Application of Transfer Pricing Rules		88
3. Methods and Method Selection and Application		89
3.1 Transfer Pricing Methods		89
3.2 Unspecified Methods		93
3.3 Hierarchy of Methods		93
3.4 Ranges and Statistical Measures		94
3.5 Comparability Adjustments		94
4. Intangibles		95
4.1 Notable Rules		95
4.2 Hard-to-Value Intangibles		95
4.3 Cost Sharing/Cost Contribution Arrangements		96
5. Adjustments		96
5.1 Upward Transfer Pricing Adjustments		96
5.2 Secondary Transfer Pricing Adjustments		97
6. Cross-Border Information Sharing		97
6.1 Sharing Taxpayer Information		97
6.2 Joint Audits		98
7. Advance Pricing Agreements (APAs)		98
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		98
7.2 Administration of Programmes		99
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		99
7.4 Limits on Taxpayers/Transactions Eligible for an APA		99
7.5 APA Application Deadlines		99
7.6 APA User Fees		99
7.7 Duration of APA Cover		99
7.8 Retroactive Effect for APAs		100
8. Penalties and Documentation		100
8.1 Transfer Pricing Penalties and Defences		100
8.2 Transfer Pricing Documentation		101
9. Alignment With OECD Transfer Pricing Guidelines		102
9.1 Alignment and Differences		102
9.2 Arm’s Length Principle		103
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		103
9.4 Impact of BEPS 2.0		103
9.5 Entities Bearing the Risk of Another Entity’s Operations		104
10. Relevance of the United Nations Practical Manual on Transfer Pricing		104
10.1 Impact of UN Practical Manual on Transfer Pricing		104
11. Safe Harbours or Other Unique Rules		104
11.1 Transfer Pricing Safe Harbours		104
11.2 Rules on Savings Arising From Operating in the Jurisdiction		105
11.3 Unique Transfer Pricing Rules or Practices		105
11.4 Financial Transactions		105
12. Co-Ordination With Customs Valuation		106
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		106
13. Controversy Process		106
13.1 Options and Requirements in Transfer Pricing Controversies		106
14. Judicial Precedent		107
14.1 Judicial Precedent on Transfer Pricing		107
14.2 Significant Court Rulings		107
15. Foreign Payment Restrictions		107
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		107
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		107
15.3 Effects of Other Countries’ Legal Restrictions		108
16. Transparency and Confidentiality		108
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		108
16.2 Use of “Secret Comparables”		108
1. Rules Governing Transfer Pricing		121
1.1 Statutes and Regulations		121
1.2 Current Regime and Recent Changes		121
2. Definition of Control/Related Parties		123
2.1 Application of Transfer Pricing Rules		123
3. Methods and Method Selection and Application		123
3.1 Transfer Pricing Methods		123
3.2 Unspecified Methods		124
3.3 Hierarchy of Methods		124
3.4 Ranges and Statistical Measures		124
3.5 Comparability Adjustments		124
4. Intangibles		124
4.1 Notable Rules		124
4.2 Hard-to-Value Intangibles		125
4.3 Cost Sharing/Cost Contribution Arrangements		125
5. Adjustments		125
5.1 Upward Transfer Pricing Adjustments		125
5.2 Secondary Transfer Pricing Adjustments		125
6. Cross-Border Information Sharing		125
6.1 Sharing Taxpayer Information		125
6.2 Joint Audits		125
7. Advance Pricing Agreements (APAs)		125
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		125
7.2 Administration of Programmes		127
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		127
7.4 Limits on Taxpayers/Transactions Eligible for an APA		127
7.5 APA Application Deadlines		127
7.6 APA User Fees		127
7.7 Duration of APA Cover		127
7.8 Retroactive Effect for APAs		127
8. Penalties and Documentation		127
8.1 Transfer Pricing Penalties and Defences		127
8.2 Transfer Pricing Documentation		127
9. Alignment With OECD Transfer Pricing Guidelines		128
9.1 Alignment and Differences		128
9.2 Arm’s Length Principle		128
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		128
9.4 Impact of BEPS 2.0		128
9.5 Entities Bearing the Risk of Another Entity’s Operations		128
10. Relevance of the United Nations Practical Manual on Transfer Pricing		128
10.1 Impact of UN Practical Manual on Transfer Pricing		128
11. Safe Harbours or Other Unique Rules		128
11.1 Transfer Pricing Safe Harbours		128
11.2 Rules on Savings Arising From Operating in the Jurisdiction		130
11.3 Unique Transfer Pricing Rules or Practices		130
11.4 Financial Transactions		130
12. Co-Ordination With Customs Valuation		130
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		130
13. Controversy Process		130
13.1 Options and Requirements in Transfer Pricing Controversies		130
14. Judicial Precedent		130
14.1 Judicial Precedent on Transfer Pricing		130
14.2 Significant Court Rulings		130
15. Foreign Payment Restrictions		131
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		131
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		131
15.3 Effects of Other Countries’ Legal Restrictions		131
16. Transparency and Confidentiality		131
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		131
16.2 Use of “Secret Comparables”		131
1. Rules Governing Transfer Pricing		142
1.1 Statutes and Regulations		142
1.2 Current Regime and Recent Changes		142
2. Definition of Control/Related Parties		142
2.1 Application of Transfer Pricing Rules		142
3. Methods and Method Selection and Application		143
3.1 Transfer Pricing Methods		143
3.2 Unspecified Methods		143
3.3 Hierarchy of Methods		143
3.4 Ranges and Statistical Measures		143
3.5 Comparability Adjustments		143
4. Intangibles		144
4.1 Notable Rules		144
4.2 Hard-to-Value Intangibles		144
4.3 Cost Sharing/Cost Contribution Arrangements		144
5. Adjustments		144
5.1 Upward Transfer Pricing Adjustments		144
5.2 Secondary Transfer Pricing Adjustments		144
6. Cross-Border Information Sharing		145
6.1 Sharing Taxpayer Information		145
6.2 Joint Audits		145
7. Advance Pricing Agreements (APAs)		145
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		145
7.2 Administration of Programmes		146
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		146
7.4 Limits on Taxpayers/Transactions Eligible for an APA		146
7.5 APA Application Deadlines		146
7.6 APA User Fees		146
7.7 Duration of APA Cover		146
7.8 Retroactive Effect for APAs		146
8. Penalties and Documentation		147
8.1 Transfer Pricing Penalties and Defences		147
8.2 Transfer Pricing Documentation		148
9. Alignment With OECD Transfer Pricing Guidelines		149
9.1 Alignment and Differences		149
9.2 Arm’s Length Principle		149
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		150
9.4 Impact of BEPS 2.0		151
9.5 Entities Bearing the Risk of Another Entity’s Operations		151
10. Relevance of the United Nations Practical Manual on Transfer Pricing		151
10.1 Impact of UN Practical Manual on Transfer Pricing		151
11. Safe Harbours or Other Unique Rules		151
11.1 Transfer Pricing Safe Harbours		151
11.2 Rules on Savings Arising From Operating in the Jurisdiction		152
11.3 Unique Transfer Pricing Rules or Practices		152
11.4 Financial Transactions		152
12. Co-Ordination With Customs Valuation		152
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		152
13. Controversy Process		153
13.1 Options and Requirements in Transfer Pricing Controversies		153
14. Judicial Precedent		155
14.1 Judicial Precedent on Transfer Pricing		155
14.2 Significant Court Rulings		155
15. Foreign Payment Restrictions		158
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		158
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		158
15.3 Effects of Other Countries’ Legal Restrictions		159
16. Transparency and Confidentiality		159
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		159
16.2 Use of “Secret Comparables”		159
1. Rules Governing Transfer Pricing		170
1.1 Statutes and Regulations		170
1.2 Current Regime and Recent Changes		170
2. Definition of Control/Related Parties		171
2.1 Application of Transfer Pricing Rules		171
3. Methods and Method Selection and Application		172
3.1 Transfer Pricing Methods		172
3.2 Unspecified Methods		172
3.3 Hierarchy of Methods		173
3.4 Ranges and Statistical Measures		173
3.5 Comparability Adjustments		174
4. Intangibles		174
4.1 Notable Rules		174
4.2 Hard-to-Value Intangibles		175
4.3 Cost Sharing/Cost Contribution Arrangements		175
5. Adjustments		176
5.1 Upward Transfer Pricing Adjustments		176
5.2 Secondary Transfer Pricing Adjustments		176
6. Cross-Border Information Sharing		177
6.1 Sharing Taxpayer Information		177
6.2 Joint Audits		177
7. Advance Pricing Agreements (APAs)		177
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		177
7.2 Administration of Programmes		177
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		178
7.4 Limits on Taxpayers/Transactions Eligible for an APA		178
7.5 APA Application Deadlines		178
7.6 APA User Fees		179
7.7 Duration of APA Cover		179
7.8 Retroactive Effect for APAs		179
8. Penalties and Documentation		179
8.1 Transfer Pricing Penalties and Defences		179
8.2 Transfer Pricing Documentation		179
9. Alignment With OECD Transfer Pricing Guidelines		181
9.1 Alignment and Differences		181
9.2 Arm’s Length Principle		182
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		182
9.4 Impact of BEPS 2.0		182
9.5 Entities Bearing the Risk of Another Entity’s Operations		182
10. Relevance of the United Nations Practical Manual on Transfer Pricing		183
10.1 Impact of UN Practical Manual on Transfer Pricing		183
11. Safe Harbours or Other Unique Rules		183
11.1 Transfer Pricing Safe Harbours		183
11.2 Rules on Savings Arising From Operating in the Jurisdiction		183
11.3 Unique Transfer Pricing Rules or Practices		183
11.4 Financial Transactions		184
12. Co-Ordination With Customs Valuation		184
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		184
13. Controversy Process		184
13.1 Options and Requirements in Transfer Pricing Controversies		184
14. Judicial Precedent		186
14.1 Judicial Precedent on Transfer Pricing		186
14.2 Significant Court Rulings		186
15. Foreign Payment Restrictions		188
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		188
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		188
15.3 Effects of Other Countries’ Legal Restrictions		188
16. Transparency and Confidentiality		188
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		188
16.2 Use of “Secret Comparables”		188
1. Rules Governing Transfer Pricing		202
1.1 Statutes and Regulations		202
1.2 Current Regime and Recent Changes		202
2. Definition of Control/Related Parties		204
2.1 Application of Transfer Pricing Rules		204
3. Methods and Method Selection and Application		205
3.1 Transfer Pricing Methods		205
3.2 Unspecified Methods		205
3.3 Hierarchy of Methods		205
3.4 Ranges and Statistical Measures		206
3.5 Comparability Adjustments		206
4. Intangibles		206
4.1 Notable Rules		206
4.2 Hard-to-Value Intangibles		206
4.3 Cost Sharing/Cost Contribution Arrangements		206
5. Adjustments		206
5.1 Upward Transfer Pricing Adjustments		206
5.2 Secondary Transfer Pricing Adjustments		207
6. Cross-Border Information Sharing		207
6.1 Sharing Taxpayer Information		207
6.2 Joint Audits		208
7. Advance Pricing Agreements (APAs)		208
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		208
7.2 Administration of Programmes		209
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		209
7.4 Limits on Taxpayers/Transactions Eligible for an APA		209
7.5 APA Application Deadlines		210
7.6 APA User Fees		210
7.7 Duration of APA Cover		210
7.8 Retroactive Effect for APAs		210
8. Penalties and Documentation		211
8.1 Transfer Pricing Penalties and Defences		211
8.2 Transfer Pricing Documentation		212
9. Alignment With OECD Transfer Pricing Guidelines		215
9.1 Alignment and Differences		215
9.2 Arm’s Length Principle		215
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		215
9.4 Impact of BEPS 2.0		215
9.5 Entities Bearing the Risk of Another Entity’s Operations		216
10. Relevance of the United Nations Practical Manual on Transfer Pricing		216
10.1 Impact of UN Practical Manual on Transfer Pricing		216
11. Safe Harbours or Other Unique Rules		216
11.1 Transfer Pricing Safe Harbours		216
11.2 Rules on Savings Arising From Operating in the Jurisdiction		217
11.3 Unique Transfer Pricing Rules or Practices		217
11.4 Financial Transactions		217
12. Co-Ordination With Customs Valuation		217
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		217
13. Controversy Process		217
13.1 Options and Requirements in Transfer Pricing Controversies		217
14. Judicial Precedent		220
14.1 Judicial Precedent on Transfer Pricing		220
14.2 Significant Court Rulings		220
15. Foreign Payment Restrictions		221
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		221
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		221
15.3 Effects of Other Countries’ Legal Restrictions		221
16. Transparency and Confidentiality		221
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		221
16.2 Use of “Secret Comparables”		222
1. Rules Governing Transfer Pricing		234
1.1 Statutes and Regulations		234
1.2 Current Regime and Recent Changes		237
2. Definition of Control/Related Parties		238
2.1 Application of Transfer Pricing Rules		238
3. Methods and Method Selection and Application		238
3.1 Transfer Pricing Methods		238
3.2 Unspecified Methods		239
3.3 Hierarchy of Methods		239
3.4 Ranges and Statistical Measures		239
3.5 Comparability Adjustments		239
4. Intangibles		239
4.1 Notable Rules		239
4.2 Hard-to-Value Intangibles		239
4.3 Cost Sharing/Cost Contribution Arrangements		240
5. Adjustments		240
5.1 Upward Transfer Pricing Adjustments		240
5.2 Secondary Transfer Pricing Adjustments		241
6. Cross-Border Information Sharing		241
6.1 Sharing Taxpayer Information		241
6.2 Joint Audits		242
7. Advance Pricing Agreements (APAs)		243
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		243
7.2 Administration of Programmes		243
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		243
7.4 Limits on Taxpayers/Transactions Eligible for an APA		243
7.5 APA Application Deadlines		244
7.6 APA User Fees		244
7.7 Duration of APA Cover		244
7.8 Retroactive Effect for APAs		244
8. Penalties and Documentation		244
8.1 Transfer Pricing Penalties and Defences		244
8.2 Transfer Pricing Documentation		245
9. Alignment With OECD Transfer Pricing Guidelines		245
9.1 Alignment and Differences		245
9.2 Arm’s Length Principle		245
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		245
9.4 Impact of BEPS 2.0		246
9.5 Entities Bearing the Risk of Another Entity’s Operations		246
10. Relevance of the United Nations Practical Manual on Transfer Pricing		246
10.1 Impact of UN Practical Manual on Transfer Pricing		246
11. Safe Harbours or Other Unique Rules		246
11.1 Transfer Pricing Safe Harbours		246
11.2 Rules on Savings Arising From Operating in the Jurisdiction		247
11.3 Unique Transfer Pricing Rules or Practices		247
11.4 Financial Transactions		247
12. Co-Ordination With Customs Valuation		247
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		247
13. Controversy Process		247
13.1 Options and Requirements in Transfer Pricing Controversies		247
14. Judicial Precedent		248
14.1 Judicial Precedent on Transfer Pricing		248
14.2 Significant Court Rulings		248
15. Foreign Payment Restrictions		250
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		250
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		250
15.3 Effects of Other Countries’ Legal Restrictions		250
16. Transparency and Confidentiality		250
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		250
16.2 Use of “Secret Comparables”		250
1. Rules Governing Transfer Pricing		264
1.1 Statutes and Regulations		264
1.2 Current Regime and Recent Changes		264
2. Definition of Control/Related Parties		266
2.1 Application of Transfer Pricing Rules		266
3. Methods and Method Selection and Application		267
3.1 Transfer Pricing Methods		267
3.2 Unspecified Methods		267
3.3 Hierarchy of Methods		267
3.4 Ranges and Statistical Measures		267
3.5 Comparability Adjustments		268
4. Intangibles		268
4.1 Notable Rules		268
4.2 Hard-to-Value Intangibles		268
4.3 Cost Sharing/Cost Contribution Arrangements		268
5. Adjustments		269
5.1 Upward Transfer Pricing Adjustments		269
5.2 Secondary Transfer Pricing Adjustments		269
6. Cross-Border Information Sharing		269
6.1 Sharing Taxpayer Information		269
6.2 Joint Audits		270
7. Advance Pricing Agreements (APAs)		270
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		270
7.2 Administration of Programmes		271
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		271
7.4 Limits on Taxpayers/Transactions Eligible for an APA		271
7.5 APA Application Deadlines		272
7.6 APA User Fees		272
7.7 Duration of APA Cover		272
7.8 Retroactive Effect for APAs		272
8. Penalties and Documentation		272
8.1 Transfer Pricing Penalties and Defences		272
8.2 Transfer Pricing Documentation		273
9. Alignment With OECD Transfer Pricing Guidelines		273
9.1 Alignment and Differences		273
9.2 Arm’s Length Principle		274
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		274
9.4 Impact of BEPS 2.0		274
9.5 Entities Bearing the Risk of Another Entity’s Operations		275
10. Relevance of the United Nations Practical Manual on Transfer Pricing		275
10.1 Impact of UN Practical Manual on Transfer Pricing		275
11. Safe Harbours or Other Unique Rules		275
11.1 Transfer Pricing Safe Harbours		275
11.2 Rules on Savings Arising From Operating in the Jurisdiction		276
11.3 Unique Transfer Pricing Rules or Practices		276
11.4 Financial Transactions		276
12. Co-Ordination With Customs Valuation		276
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		276
13. Controversy Process		276
13.1 Options and Requirements in Transfer Pricing Controversies		276
14. Judicial Precedent		277
14.1 Judicial Precedent on Transfer Pricing		277
14.2 Significant Court Rulings		277
15. Foreign Payment Restrictions		278
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		278
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		279
15.3 Effects of Other Countries’ Legal Restrictions		279
16. Transparency and Confidentiality		279
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		279
16.2 Use of “Secret Comparables”		279
1. Rules Governing Transfer Pricing		294
1.1 Statutes and Regulations		294
1.2 Current Regime and Recent Changes		294
2. Definition of Control/Related Parties		295
2.1 Application of Transfer Pricing Rules		295
3. Methods and Method Selection and Application		296
3.1 Transfer Pricing Methods		296
3.2 Unspecified Methods		297
3.3 Hierarchy of Methods		297
3.4 Ranges and Statistical Measures		297
3.5 Comparability Adjustments		298
4. Intangibles		298
4.1 Notable Rules		298
4.2 Hard-to-Value Intangibles		299
4.3 Cost Sharing/Cost Contribution Arrangements		299
5. Adjustments		299
5.1 Upward Transfer Pricing Adjustments		299
5.2 Secondary Transfer Pricing Adjustments		300
6. Cross-Border Information Sharing		300
6.1 Sharing Taxpayer Information		300
6.2 Joint Audits		300
7. Advance Pricing Agreements (APAs)		301
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		301
7.2 Administration of Programmes		301
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		301
7.4 Limits on Taxpayers/Transactions Eligible for an APA		302
7.5 APA Application Deadlines		302
7.6 APA User Fees		302
7.7 Duration of APA Cover		303
7.8 Retroactive Effect for APAs		303
8. Penalties and Documentation		303
8.1 Transfer Pricing Penalties and Defences		303
8.2 Transfer Pricing Documentation		304
9. Alignment With OECD Transfer Pricing Guidelines		305
9.1 Alignment and Differences		305
9.2 Arm’s Length Principle		305
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		305
9.4 Impact of BEPS 2.0		306
9.5 Entities Bearing the Risk of Another Entity’s Operations		306
10. Relevance of the United Nations Practical Manual on Transfer Pricing		306
10.1 Impact of UN Practical Manual on Transfer Pricing		306
11. Safe Harbours or Other Unique Rules		306
11.1 Transfer Pricing Safe Harbours		306
11.2 Rules on Savings Arising From Operating in the Jurisdiction		306
11.3 Unique Transfer Pricing Rules or Practices		306
11.4 Financial Transactions		307
12. Co-Ordination With Customs Valuation		307
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		307
13. Controversy Process		307
13.1 Options and Requirements in Transfer Pricing Controversies		307
14. Judicial Precedent		308
14.1 Judicial Precedent on Transfer Pricing		308
14.2 Significant Court Rulings		308
15. Foreign Payment Restrictions		308
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		308
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		308
15.3 Effects of Other Countries’ Legal Restrictions		308
16. Transparency and Confidentiality		309
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		309
16.2 Use of “Secret Comparables”		309
1. Rules Governing Transfer Pricing		314
1.1 Statutes and Regulations		314
1.2 Current Regime and Recent Changes		314
2. Definition of Control/Related Parties		315
2.1 Application of Transfer Pricing Rules		315
3. Methods and Method Selection and Application		316
3.1 Transfer Pricing Methods		316
3.2 Unspecified Methods		316
3.3 Hierarchy of Methods		316
3.4 Ranges and Statistical Measures		317
3.5 Comparability Adjustments		317
4. Intangibles		317
4.1 Notable Rules		317
4.2 Hard-to-Value Intangibles		318
4.3 Cost Sharing/Cost Contribution Arrangements		318
5. Adjustments		319
5.1 Upward Transfer Pricing Adjustments		319
5.2 Secondary Transfer Pricing Adjustments		319
6. Cross-Border Information Sharing		320
6.1 Sharing Taxpayer Information		320
6.2 Joint Audits		320
7. Advance Pricing Agreements (APAs)		320
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		320
7.2 Administration of Programmes		321
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		321
7.4 Limits on Taxpayers/Transactions Eligible for an APA		321
7.5 APA Application Deadlines		321
7.6 APA User Fees		321
7.7 Duration of APA Cover		321
7.8 Retroactive Effect for APAs		321
8. Penalties and Documentation		322
8.1 Transfer Pricing Penalties and Defences		322
8.2 Transfer Pricing Documentation		323
9. Alignment With OECD Transfer Pricing Guidelines		324
9.1 Alignment and Differences		324
9.2 Arm’s Length Principle		324
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		324
9.4 Impact of BEPS 2.0		325
9.5 Entities Bearing the Risk of Another Entity’s Operations		325
10. Relevance of the United Nations Practical Manual on Transfer Pricing		326
10.1 Impact of UN Practical Manual on Transfer Pricing		326
11. Safe Harbours or Other Unique Rules		326
11.1 Transfer Pricing Safe Harbours		326
11.2 Rules on Savings Arising From Operating in the Jurisdiction		326
11.3 Unique Transfer Pricing Rules or Practices		327
11.4 Financial Transactions		327
12. Co-Ordination With Customs Valuation		327
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		327
13. Controversy Process		328
13.1 Options and Requirements in Transfer Pricing Controversies		328
14. Judicial Precedent		330
14.1 Judicial Precedent on Transfer Pricing		330
14.2 Significant Court Rulings		330
15. Foreign Payment Restrictions		332
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		332
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		332
15.3 Effects of Other Countries’ Legal Restrictions		332
16. Transparency and Confidentiality		333
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		333
16.2 Use of “Secret Comparables”		333
1. Rules Governing Transfer Pricing		345
1.1 Statutes and Regulations		345
1.2 Current Regime and Recent Changes		348
2. Definition of Control/Related Parties		349
2.1 Application of Transfer Pricing Rules		349
3. Methods and Method Selection and Application		349
3.1 Transfer Pricing Methods		349
3.2 Unspecified Methods		349
3.3 Hierarchy of Methods		349
3.4 Ranges and Statistical Measures		350
3.5 Comparability Adjustments		350
4. Intangibles		350
4.1 Notable Rules		350
4.2 Hard-to-Value Intangibles		350
4.3 Cost Sharing/Cost Contribution Arrangements		351
5. Adjustments		351
5.1 Upward Transfer Pricing Adjustments		351
5.2 Secondary Transfer Pricing Adjustments		351
6. Cross-Border Information Sharing		352
6.1 Sharing Taxpayer Information		352
6.2 Joint Audits		353
7. Advance Pricing Agreements (APAs)		353
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		353
7.2 Administration of Programmes		354
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		354
7.4 Limits on Taxpayers/Transactions Eligible for an APA		354
7.5 APA Application Deadlines		354
7.6 APA User Fees		354
7.7 Duration of APA Cover		354
7.8 Retroactive Effect for APAs		355
8. Penalties and Documentation		355
8.1 Transfer Pricing Penalties and Defences		355
8.2 Transfer Pricing Documentation		357
9. Alignment With OECD Transfer Pricing Guidelines		357
9.1 Alignment and Differences		357
9.2 Arm’s Length Principle		357
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		358
9.4 Impact of BEPS 2.0		358
9.5 Entities Bearing the Risk of Another Entity’s Operations		359
10. Relevance of the United Nations Practical Manual on Transfer Pricing		360
10.1 Impact of UN Practical Manual on Transfer Pricing		360
11. Safe Harbours or Other Unique Rules		360
11.1 Transfer Pricing Safe Harbours		360
11.2 Rules on Savings Arising From Operating in the Jurisdiction		360
11.3 Unique Transfer Pricing Rules or Practices		360
11.4 Financial Transactions		360
12. Co-Ordination With Customs Valuation		361
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		361
13. Controversy Process		361
13.1 Options and Requirements in Transfer Pricing Controversies		361
14. Judicial Precedent		362
14.1 Judicial Precedent on Transfer Pricing		362
14.2 Significant Court Rulings		362
15. Foreign Payment Restrictions		364
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		364
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		364
15.3 Effects of Other Countries’ Legal Restrictions		365
16. Transparency and Confidentiality		365
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		365
16.2 Use of “Secret Comparables”		365
1. Rules Governing Transfer Pricing		376
1.1 Statutes and Regulations		376
1.2 Current Regime and Recent Changes		376
2. Definition of Control/Related Parties		376
2.1 Application of Transfer Pricing Rules		376
3. Methods and Method Selection and Application		376
3.1 Transfer Pricing Methods		376
3.2 Unspecified Methods		377
3.3 Hierarchy of Methods		377
3.4 Ranges and Statistical Measures		377
3.5 Comparability Adjustments		377
4. Intangibles		377
4.1 Notable Rules		377
4.2 Hard-to-Value Intangibles		378
4.3 Cost Sharing/Cost Contribution Arrangements		378
5. Adjustments		378
5.1 Upward Transfer Pricing Adjustments		378
5.2 Secondary Transfer Pricing Adjustments		379
6. Cross-Border Information Sharing		379
6.1 Sharing Taxpayer Information		379
6.2 Joint Audits		379
7. Advance Pricing Agreements (APAs)		379
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		379
7.2 Administration of Programmes		379
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		380
7.4 Limits on Taxpayers/Transactions Eligible for an APA		380
7.5 APA Application Deadlines		380
7.6 APA User Fees		380
7.7 Duration of APA Cover		380
7.8 Retroactive Effect for APAs		381
8. Penalties and Documentation		381
8.1 Transfer Pricing Penalties and Defences		381
8.2 Transfer Pricing Documentation		382
9. Alignment With OECD Transfer Pricing Guidelines		382
9.1 Alignment and Differences		382
9.2 Arm’s Length Principle		382
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		383
9.4 Impact of BEPS 2.0		383
9.5 Entities Bearing the Risk of Another Entity’s Operations		383
10. Relevance of the United Nations Practical Manual on Transfer Pricing		383
10.1 Impact of UN Practical Manual on Transfer Pricing		383
11. Safe Harbours or Other Unique Rules		383
11.1 Transfer Pricing Safe Harbours		383
11.2 Rules on Savings Arising From Operating in the Jurisdiction		384
11.3 Unique Transfer Pricing Rules or Practices		384
11.4 Financial Transactions		384
12. Co-Ordination With Customs Valuation		384
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		384
13. Controversy Process		385
13.1 Options and Requirements in Transfer Pricing Controversies		385
14. Judicial Precedent		386
14.1 Judicial Precedent on Transfer Pricing		386
14.2 Significant Court Rulings		386
15. Foreign Payment Restrictions		386
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		386
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		386
15.3 Effects of Other Countries’ Legal Restrictions		386
16. Transparency and Confidentiality		386
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		386
16.2 Use of “Secret Comparables”		386
1. Rules Governing Transfer Pricing		399
1.1 Statutes and Regulations		399
1.2 Current Regime and Recent Changes		399
2. Definition of Control/Related Parties		400
2.1 Application of Transfer Pricing Rules		400
3. Methods and Method Selection and Application		401
3.1 Transfer Pricing Methods		401
3.2 Unspecified Methods		401
3.3 Hierarchy of Methods		401
3.4 Ranges and Statistical Measures		402
3.5 Comparability Adjustments		402
4. Intangibles		402
4.1 Notable Rules		402
4.2 Hard-to-Value Intangibles		403
4.3 Cost Sharing/Cost Contribution Arrangements		403
5. Adjustments		403
5.1 Upward Transfer Pricing Adjustments		403
5.2 Secondary Transfer Pricing Adjustments		403
6. Cross-Border Information Sharing		403
6.1 Sharing Taxpayer Information		403
6.2 Joint Audits		404
7. Advance Pricing Agreements (APAs)		404
7.1 Programmes Allowing for Rulings Regarding Transfer Pricing		404
7.2 Administration of Programmes		404
7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures		404
7.4 Limits on Taxpayers/Transactions Eligible for an APA		404
7.5 APA Application Deadlines		404
7.6 APA User Fees		404
7.7 Duration of APA Cover		404
7.8 Retroactive Effect for APAs		404
8. Penalties and Documentation		404
8.1 Transfer Pricing Penalties and Defences		404
8.2 Transfer Pricing Documentation		406
9. Alignment With OECD Transfer Pricing Guidelines		406
9.1 Alignment and Differences		406
9.2 Arm’s Length Principle		406
9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project		406
9.4 Impact of BEPS 2.0		406
9.5 Entities Bearing the Risk of Another Entity’s Operations		407
10. Relevance of the United Nations Practical Manual on Transfer Pricing		407
10.1 Impact of UN Practical Manual on Transfer Pricing		407
11. Safe Harbours or Other Unique Rules		407
11.1 Transfer Pricing Safe Harbours		407
11.2 Rules on Savings Arising From Operating in the Jurisdiction		407
11.3 Unique Transfer Pricing Rules or Practices		407
11.4 Financial Transactions		408
12. Co-Ordination With Customs Valuation		408
12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation		408
13. Controversy Process		408
13.1 Options and Requirements in Transfer Pricing Controversies		408
14. Judicial Precedent		409
14.1 Judicial Precedent on Transfer Pricing		409
14.2 Significant Court Rulings		409
15. Foreign Payment Restrictions		411
15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions		411
15.2 Restrictions on Outbound Payments Relating to Controlled Transactions		411
15.3 Effects of Other Countries’ Legal Restrictions		411
16. Transparency and Confidentiality		411
16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes		411
16.2 Use of “Secret Comparables”		411

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