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Issue No. 4 - 2015 of the International Transfer Pricing Journal is now available online.

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Number 4 - 2015 contains the following:
ARTICLES
International
Price Setting: Why Proactive Intercompany Margin Management Is “Behaving at Arm’s Length” and the Preferred Option for Multinational Enterprises
Frank Schoeneborn

This article explains how to avoid year-end adjustments and why proactive intercompany margin management becomes the preferred approach for multinational enterprises.

International
The OECD BEPS Project: A Status Update
Matthew Herrington

An overview of the BEPS-related papers, recently published by the OECD on 6 February 2015, is provided and this article furthermore attempts to explain the OECD’s proposed timeline for implementing the recommendations set out in those papers.

China (People's Rep.)
Value Creation Theory of the BEPS Report and China’s Reasonable Share in Global Value Allocation
Jiang Yuesheng

Recently, the OECD published seven deliverables of the BEPS Action Plan which demonstrate that the value creation theory is more in tune with the interests of Western countries. This article analyses the arguments in support of this theory and offers general thoughts and strategies, as well as specific suggestions for policy administration in order for China to obtain a reasonable share of global value allocation.

International
Transfer Pricing in a BEPS Era: Rethinking the Arm’s Length Principle – Part II
Mirjam Koomen

In the second of a two-part article, the author considers how the arm’s length principle could be enhanced to meet the substance and value alignment requirements of the OECD BEPS initiative. The boundaries and concepts of the arm’s length principle are explored, taking into account the analysis in the Part I of the article, published previously, and insights from economics. Guidance from the OECD and the case law of various jurisdictions are included in this study. Recommendations are presented to amend the Commentary on Article 9 of the OECD Model and the guidance in the OECD Guidelines.

RECENT DEVELOPMENTS
China (People's Rep.)
Bulletin 16: China Makes a Pre-Emptive Strike against BEPS

Jinghua Liu, Glenn DeSouza and Hardy Zhou

The authors consider recently introduced measures that could be used by Chinese tax authorities to deny income tax deductions for certain service fees and royalties paid by Chinese companies to their overseas affiliates. Potential strategies are also suggested for multinationals to safeguard their tax interests in China.

India
India Articulates Its View on Marketing Intangibles
Vatika Bhatnagar

The author considers the recent ruling of the Delhi High Court in the Sony Ericsson Mobile Communications case and analyses the relevant outcomes specifically as it relates to transfer pricing and marketing intangibles.

India
Outstanding Receivables: Unveiling Hidden Transactions
Ajit Kumar Jain

The author considers the transfer pricing treatment of outstanding receivables among associated enterprises in India, including numerous court cases that have addressed the issue.

Israel
Tax Authorities Publish Draft Circular on Internet Activity of Foreign Companies
Yedidya Rosensweig

A recent draft circular issued by the Israeli tax authorities sets forth their views on the application of existing rules and tax treaty provisions in the ever-evolving digital economy.

Poland
Failure to Demand Payment of Interest and Its Transfer Pricing Implications
Krzysztof Lasiński-Sulecki and Wojciech Morawski

Polish courts have recently held that transfer pricing provisions may apply in the case where the arm’s length contractual stipulations were executed in a way departing from the arm’s length standard. They also claimed that hypothetical transactions that would have taken place if transactions between associated enterprises had been at arm’s length, should have been considered in evaluating whether transfer pricing provisions were applicable.

Slovak Republic
New Guidance on Transfer Pricing Documentation
Tomas Balco

Recently, the Slovak Ministry of Finance has issued new guidance on transfer pricing documentation. This guidance establishes three categories of documentation based on the degree of detail of the information regarding a taxpayer’s risk profile and thus balances the state’s tax revenue protection interests while also attempting to relieve a potentially unreasonably high documentation burden for certain taxpayers regarded as low risk from a transfer pricing perspective.

Uruguay
Investment Promotion Regime and Tax Benefits of Shared Service Centres
Juan Bonet
A 2014 Decree has provided for tax benefits for shared service centres in addition to the benefits already available under the general investment promotion regime.
CUMULATIVE INDEX
GLOBAL COVERAGE OF TRANSFER PRICING ISSUES