January/February 2017  
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International Transfer Pricing Journal
 
This free e-mail service informs you about the contents of the forthcoming edition of International Transfer Pricing Journal.

Issue No. 1 - 2017 of the International Transfer Pricing Journal is now available online.

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Number 1- 2017 contains the following:
ARTICLES

International

The Evolving World of Global Tax Planning: Part I
Matthew Herrington and Cym H. Lowell

This article is the first in a series, which will review considerations that MNEs may want to take into account in adapting their strategies in this evolving world of global tax planning. The authors will address this vital topic in three instalments, namely (i) framing the background, (ii) anticipation of an ever-increasing agenda of disputes and (iii) the epochal opportunity for MNEs to retool their ETR planning strategies.

International
The BEPS Report on Risk Allocation: Not So Functional
Rutger Hafkenscheid

In this article, the revised interpretation of the arm’s length principle on risk allocation as presented in the BEPS Final Report on Action 8-10 is discussed. By analysis of the main points, the author contests this interpretation and suggests an alternative approach.

International
Appropriate Application of the Berry Ratio as a Profit Level Indicator
Vatika Bhatnagar

The author discusses the appropriate application of the Berry ratio as a profit level inductor. Guidance from the OECD, the United States, and Japan is considered, along with case law from Indian courts.

Portugal
Witness Testimony in Transfer Pricing Litigation
António Martins

In Portugal, an increasing number of cases involving transfer pricing disputes are being decided by arbitration courts. This article highlights the impact of testimonial evidence in some of these cases and shows how, in some circumstances, testimonial evidence plays an important role in influencing the outcome of transfer pricing cases.

India
Foreign Exchange Fluctuation and Computation of the Profit Level Indicator: Conflict between Principles of Accounting and of Transfer Pricing
Ajit Korde

This article discusses the issue as to whether foreign exchange gain or loss should be considered when computing the profit level indicator of the tested party and of comparable companies. The author concludes that it might be better to not include foreign exchange fluctuation in this computation because of the conflict between accounting principles and transfer pricing principles.

COMPARATIVE SURVEY
Implementation of Transfer Pricing Rules in Light of the BEPS Project in Latin and Central America

At the initiative of Ms Sophia Castro, the International Transfer Pricing Journal presents a series of articles on the status of the implementation of transfer pricing rules and the impact of the OECD/G20 BEPS Project in Latin and Central America.

Costa Rica
Impact of BEPS Actions on Costa Rican Transfer Pricing Regime
Sophia Castro

The author considers the current effects on the Costa Rican transfer pricing regime of the international adoption of the recommendations of the BEPS Actions related to transfer pricing, including Action 13 (regarding transfer documentation) and Actions 8, 9 and 10 (which deal with specific topics and have modified several chapters of the OECD Guidelines). First, the background of the BEPS Actions and the transfer pricing regime are described, followed by an assessment of the effects of each of the Actions.

Mexico

A Mexican Perspective on Value Creation under the OECD’s BEPS Approach to Transfer Pricing

Marta Milewska

The author reviews the economic principles governing dynamics of the current business environment, suggesting a more objective approach to be followed by the Mexican tax authorities for the purpose of transfer pricing audits in order to better evaluate how value is created by multinational enterprises.

RECENT DEVELOPMENTS
Australia
BEPS and the Diverted Profits Tax
Anton Joseph

The author examines the Australian position towards multinational enterprises which assert that they do not have a permanent establishment in Australia and therefore are not subject to tax in Australia on their income derived by supplying goods and services to customers in Australia. The newly proposed diverted profits tax and its potential application are also considered.

Ethiopia
Comprehensive Directive on Transfer Pricing Adopted
Joel Cooper and Monia Volpato

This article presents an outline of the legal framework for transfer pricing in Ethiopia, in light of the recently introduced Directive 43/2015.

Hungary
After Plastic Surgery: The BEPS-Proof Hungarian Intellectual Property Tax Regime
István Csővári

Hungary’s special tax regime on intellectual property was amended as from 1 July 2016 in order to bring Hungarian tax law in line with OECD recommendations contained in the BEPS Action 5 Final Report.

India
Transfer Pricing Litigation Trends and Dispute Resolution Mechanisms
Sunny Kishore Bilaney

Transfer pricing is one of the most litigious areas of taxation. This article discusses transfer pricing litigation trends in India and various dispute resolution mechanisms available to taxpayers for resolving transfer pricing disputes. In addition, analyses of statistical data relating to results achieved by various dispute resolution mechanisms are also presented.

Indonesia
Transfer Pricing Dispute Resolution and Mutual Agreement Procedures: An Indonesian Perspective
Yeni Mulyani

This article examines the Mutual Agreement Procedures programme in Indonesia, including recent developments and changes in procedure, describing its advantages over other domestic dispute resolution options such as objection to the Directorate General of Taxes and appeal to the Tax Court.

GLOBAL COVERAGE OF TRANSFER PRICING ISSUES