January/February 2018  
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This free e-mail service informs you about the contents of the forthcoming edition of International Transfer Pricing Journal.

Issue No. 1 - 2018 of the International Transfer Pricing Journal is now available online.

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Number 1 - 2018 contains the following:

Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment

Caroline Silberztein and Océane Le Naourès

On September 2017, the OECD released The Country-by-Country Handbook on Effective Tax Risk Assessment, which provides tax authorities with guidance on ways to incorporate information obtained under CbC reporting into their tax risk assessment processes, the types of tax risk indicators that may be identified using CbC reports, and the challenges that may arise in the process. In this article, the authors outline the key elements provided in this report, illustrate with a practical example how tax authorities may use CbC reporting information to supplement their existing tax risk assessment and discuss the consequences thereof.

European Union

New Rules to Resolve Tax Disputes

Danny Oosterhoff

On 10 October 2017, the ECOFIN Council adopted new rules to better resolve tax disputes. The new rules will give taxpayers seeking resolution for double taxation issues much more certainty and therefore provide a clearly improved dispute resolution mechanism. This article discusses both the new rules and the EU Directive proposed in 2016 that preceded them.

Remuneration of Intra-Group Services: One Size Fits All?
Mark Bonekamp, Dianne Berry and Bart Konings
This article deals with the developments regarding the appropriate remuneration method for intra-group services, specifically with the issue whether cost-based methods are the most appropriate method of remuneration.
Two Recent Transfer Pricing Preliminary Rulings by the Finnish Supreme Administrative Court
Merja Raunio and Anita Isomaa-Myllymäki

On 13 September 2017, the Finnish Supreme Administrative Court published two rulings concerning transfer pricing. The ruling KHO 2017:145 dealt with the transfer pricing of an ERP system through a SaaS model. The ruling KHO 2017:146 concerned the service provider’s obligation to add a mark-up on its costs when defining an arm’s length service charge. This article explains the facts of these cases and considers the rulings and their implications for the application of the arm’s length standard in Finland.


Concept of Pass-Through Costs and Their Treatment

Sunny K. Bilaney

The author analyses the concept of pass-through costs based on guidance from the OECD Transfer Pricing Guidelines, the UN Transfer Pricing Manual and transfer pricing rulings. Furthermore, this article contains a discussion on the treatment of pass-through costs from a transfer pricing perspective.

An Overview of the Future Luxembourg Intellectual Property Tax Regime
Filip Vukovic and Victor Mermet

On 4 August 2017, the Luxembourg Finance Minister introduced a draft bill setting out a new Intellectual Property tax regime for Luxembourg, intended to enter into force as from the 2018 tax year. The bill introduces a new article 50ter within the Luxembourg Income Tax Law. Based on this draft legislation, net income derived from eligible IP assets will (subject to a “nexus ratio” restriction) enjoy an 80% exemption for corporate income tax and municipal business tax purposes. The eligible IP assets will also benefit from a full net wealth tax exemption.

What To Include in the TP Documentation in Poland According to the New Regulation of the Minister of Development and Finance
Marcin Jamroży
2017 has seen numerous important law changes affecting TP documentation in Poland. Mainly as a response to the Base Erosion and Profit Shifting (BEPS) Action Plan adopted by the OECD and G20 countries, new responsibilities with regard to transfer pricing documentation have been imposed in Poland, as of 1 January 2017. The new legislation has significantly extended the scope of the TP documentation and reporting requirements to be provided to tax authorities.
United Kingdom
Action Group of HMRC on Diverted Profits Tax
Ravi Ahlawat and Nick Woodford
This article provides a summary of the main Diverted Profits Tax rules. In addition to analysing the rules, it also highlights some of the key challenges and practical difficulties in applying them
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