March/April 2015  
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International Transfer Pricing Journal
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Issue No. 2 - 2015 of the International Transfer Pricing Journal is now available online.

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Number 2 - 2015 contains the following:
Australian Taxation Office’s Transfer Pricing Risk-Rating System
Michael Butler, Lucille White and Montana Prpic

The authors review the risk-rating system used by the Australian Taxation Office (ATO) to determine whether to review and audit taxpayers’ transfer pricing arrangements.

Regulations Provide Further Guidance on the Application of the Authorized OECD Approach to the Attribution of Profit to Permanent Establishments
Ulf Andresen

The author considers the recently issued Regulations on the application of the authorized OECD approach under existing German tax treaties, specifically for the allocation of profit to permanent establishments.


(Non-)Recognition of Transactions between Associated Enterprises: On Behaving in a Commercially Rational Manner, Decision-Making Traps and BEPS

Martijn de Lange, Paul Lankhorst and Rutger Hafkenscheid

The possibilities for reclassifying and disregarding controlled transactions between associated enterprises are explored in this article by means of analysing OECD guidance in this area and looking at how such guidance is interpreted and implemented by tax authorities, drawing on the Netherlands as a specific example. The relevance of the BEPS project together with various economic theories will also be examined, as well as how such theories interact with OECD guidance on this topic.

Transfer Pricing Economics for the Digital Economy
Julien Pellefigue

The author examines, from an economic perspective, the problem of the allocation of taxable base between states with a power to tax in the context of the digital economy.

Economic Adjustment: Capacity Utilization Adjustment

Sunny Bilaney

This article discusses how a difference in the level of capacity utilization impacts the profit margin and when taxpayers should consider making capacity utilization adjustment in their transfer pricing analysis. As there is no authoritative guidance available on this subject, the author looks into various practical approaches that could be used by taxpayers to calculate a capacity utilization adjustment. Finally, the article provides tips for documenting such adjustment in a transfer pricing study report.

Guidance Regarding Reconstruction of Cross-Border Transactions by the Commissioner

Anton Joseph

This article considers subdivision 815-B of the Income Tax Assessment Act, which was introduced in 2013, as well as Taxation Ruling TR 2014/16 on the determination of substance in cross-border transactions.

Experience with the New Transfer Pricing Documentation Requirement
Pierre-Jean Douvier and Xavier Daluzeau

At the end of 2013, enterprises established in France and subject to the obligation to prepare transfer pricing documentation prior to a tax audit, became also obliged to file annually a declaration of their transfer pricing policy. The authors offer guidance on how to fulfil this obligation and consider practical issues related to the new obligation.

Cost-Plus Contract R&D Services: Should State Subsidies Be Deducted from the Cost Base?

Caroline Silberztein and Benoît Granel

This article examines the ruling by the Lower Administrative Court of Montreuil in the Philips France SAS case, in which the Court contemplated whether state subsidies should be deducted from the cost base for transfer pricing purposes.

APA Guidance Released by Tax Authorities
Katerina Perrou

The Greek tax authorities have issued guidance for taxpayers wishing to seek an advance pricing agreement, including as regards preliminary consultations and the negotiation process. Sample forms have also been made available to taxpayers.

Analysis of High Court Rulings in N.G.C. Network and  L’Oreal India
Sunny Bilaney

The author analyses two recent High Court rulings in the N.G.C. Network (India) and L’Oreal India cases.

Analysis of Vodafone Case on Applicability of Transfer Pricing Provisions to Issuance of Equity Shares
Vispi T. Patel and Bhavya Haria

In addition to the recent ruling by the Bombay High Court in the Vodafone India Services case, the authors consider related case law on the applicability of transfer pricing provisions to the issuance of equity shares to a related party.