Transfer pricing and tax-effective supply chain management - Ernst & Young - United States

Ernst & Young LLP’s Transfer Pricing practice was recently recognized by Euromoney's International Tax Review publication as the "North America Transfer Pricing Firm of the Year" for the third year in a row. The awards are presented on a national basis, except for the US, where firms vied for Tax Firm of the Year and Transfer Pricing Firm of the Year in six markets. Besides naming the overall US practice as the best, International Tax Review also awarded Firm of the Year distinction to Ernst & Young's Transfer Pricing practices in Houston, Dallas and San Francisco.

International Tax Review also gave Firm of the Year awards to the transfer pricing practices for the Ernst & Young member firms in Canada and Venezuela.

Purvez Captain, Americas Director of Transfer Pricing Economics and Services, noted that "this is great recognition of the hard work and dedication of our Transfer Pricing professionals across the Americas. Their commitment to excellence sets the standard in transfer pricing leadership recognized by the market."

October 2009 FSTP worldwide
Financial services transfer pricing insights

• Transfer pricing survey
• Compensation as an allocation driver
• Impact of the economic downturn on transfer pricing
• New Australian Taxation Office schedule
• The winds of change
• People profile
• Canada Revenue Agency applies a magnifying glass to financial services transactions and institutions

More editions:

• Financial services transfer pricing insights worldwide - July 2009 edition
• Financial services transfer pricing insights worldwide - April 2009 edition
• Financial services transfer pricing insights worldwide - January 2009 edition

Thought leadership

Status update: Russian transfer pricing reform (167.43kb)
18 February 2010
The new transfer pricing (TP) draft law has been approved in the first reading in the Russian parliament (Duma) on 19 February 2010. The text of the draft law remained unchanged since its submission to the Duma on 25 December 2009. There is an intention to have the law passed within the following six months so that taxpayers have sufficient time to get prepared for the new TP rules. The plan is for the new TP law to come into force as of 1 January 2011.

Proposed change in the German legislation for transfer of business functions: “Transfer Package” (363.94kb)
12 February 2010
See the proposed changes in the latest German legislation for transfer of business functions from a German company to a non-resident business.

Introduction of Irish transfer pricing regulations (142.31kb)
12 February 2010
The latest Irish Finance Bill passed on February 4 saw the introduction of new transfer pricing regulations. See our report.

New IRS approach to FIN 48 reporting requirements; What are the implications for Canadian transfer pricing? (189.15 KB)
9 February 2010
In an address to the New York State Bar Association on 26 January 2010, Internal Revenue Service (IRS) Commissioner Doug Shulman made a significant announcement regarding corporate tax reporting in the United States. Commissioner Shulman announced that the IRS is developing a new schedule intended for use by business taxpayers with assets over US$10 million to report uncertain tax positions on their tax returns. The schedule, to be filed with the corporate tax return, will require a concise description of each uncertain tax position and the maximum amount of potential US federal tax liability attributable to those positions (determined without regard to the taxpayer’s risk analysis of its likelihood of prevailing on the merits).

Still no guarantee: landmark General Electric transfer pricing case appealed (187.64)
28 January 2010
The Crown has filed an appeal of the recent Tax Court of Canada decision in General Electric Capital Canada v the Queen (2009 TCC 563). In effect, the appeal means that uncertainty around transfer pricing of financial transactions will remain until the appeal is resolved. Taxpayers should act with this risk in mind.

IRS issues Competent Authority statistics report (167.93 KB)
15 January 2010
The report provides a statistical update of the Competent Authority Program, including a summary of year-end case inventory and the average processing time of closed cases. The report also provides information regarding percentages of cases where Competent Authority relief has been granted and gives some indication of the relief that companies received as a result of Competent Authority assistance.

Brazilian government institutes new margin for RPM and amends transfer pricing law (167.93 KB)
15 January 2010
On 29 December 2009, the Brazilian Executive issued Provisional Measure # 478 (MP 478), which amends the Brazilian transfer pricing legislation. According to its preamble, the objective of the proposed changes is to introduce in the law some consistency with the Brazilian transfer pricing regulations stated in normative instructions issued by the Federal Revenue of Brazil (RFB), in order to mitigate controversy around the subject.

Russian transfer pricing reform (167.93 KB)
6 January 2010
Recent communication from the Ministry of Finance indicates that the draft transfer pricing (TP) law is now undergoing fi nal considerations within the government. So far, no signifi cant changes have been made and the parliamentary reading on this are expected to take place in April/May 2010. The plan is for the new TP law to come into force as of 1 January 2011.

Hong Kong issues its first set of transfer pricing guidelines (143.9KB)
14 December 2009
On 4 December 2009, the Hong Kong Inland Revenue Department (IRD) released Departmental Interpretation and Practice Notes No. 46 (DIPN 46), “Transfer Pricing Guidelines – Methodologies and Related Issues.” DIPN 46 is a positive development for multinational taxpayers as it clarifies the IRD’s interpretations with regard to key transfer pricing issues.

The Russian Ministry of Finance (MinFin) published a new draft transfer pricing (TP) law (144 KB)
30 October 2009
The draft law was developed by MinFin in cooperation with the Ministry for Economic Development. The new draft law is broadly in line with previous draft laws released by MinFin in 2007 though it also includes certain elements adapted from the “alternative” TP draft law sponsored by the Russian Union of Entrepreneurs and Industrialists (RSPP), also released in late 2007. It is expected that the new TP draft law will be submitted to the Duma (Russian parliament) during spring 2010 and the targeted introduction date is 1 January 2011.

Hungarian transfer pricing documentation to be simplified (795 KB)
23 October 2009
Many analyses of international tax systems compare the US to the OECD countries. While being readily available, these comparisons necessarily include a number of small countries that are not headquarters to any major global competitors of US companies. In addition, these OECD-based comparisons omit some important emerging economies that are headquarters to significant global competitors. Accelerating globalization is changing the competitive landscape for US companies, but that competition isn’t from companies headquartered in Iceland, Slovak Republic or even Ireland.

The changing landscape of headquarter locations and headquarter taxation of Fortune Global 500 companies (820 KB)
1 October 2009
Many analyses of international tax systems compare the US to the OECD countries. While being readily available, these comparisons necessarily include a number of small countries that are not headquarters to any major global competitors of US companies. In addition, these OECD-based comparisons omit some important emerging economies that are headquarters to significant global competitors.

OECD releases a draft of updated transfer pricing guidelines (171 KB)
18 September 2009
On 9 September 2009, the Organisation for Economic Co-Operation and Development (OECD) released a Proposed Revision of Chapters I-III of theTransfer Pricing Guidelines (Draft).

IRS issues third field directive on Section 936 exit strategies (2444.06 KB)
28 August 2009
On 14 August 2009, the IRS Large and Mid-Size Business Division (LMSB) issued an Industry Director Directive on Section 936 exit strategies #3 (Directive #3 or the Directive) that provides IRS examiners with further information and instructions regarding the collateral effects of Section 482 and/or Section 367(d) adjustments that arise in connection with the restructuring of Section 936 corporations.

Temporary cost sharing arrangement regulations reporting requirement clarified (148.06 KB)
6 August 2009
Each participant of a cost sharing arrangement (CSA) is required under the new cost-sharing rules to file with the IRS no later than 2 September 2009 a “Statement of Controlled Participant to Section 1.482-7T Cost Sharing Arrangement”1 (CSA Statement) regardless of whether the participant is required to file a tax return in the US. For the 2 September filing, non-US controlled participants must request an IRS tax identification number (TIN) to include with the CSA Statement.

Effective Date for Final Section 482 Services Regulations Corrected (880 KB)
5 August 2009
Tax Alert 2009-1170 erroneously reported that the final Section 482 services regulations were effective for tax years ending after July 31, 2009. In fact, the regulations are effective for tax years beginning after July 31, 2009. The corrected version of the Alert is now available.

Greece enacts transfer pricing documentation, thin capitalization rules (131.8 KB)
5 August 2009
On 14 July 2009 a new law was enacted by the Greek parliament, Transfer Pricing Documentation Rules, Thin Capitalization Rules, procedures of fast licensing and other provisions, the main provisions of which provide the: Transfer pricing and cross-border transfer pricing documentation rules

Transfer Pricing University

As part of our ongoing commitment to help companies manage their growing transfer pricing requirements, Ernst & Young LLP is proud to introduce Transfer Pricing University -- an exceptional training program for in-house tax teams. This multi-course series is designed to build a practical understanding of transfer pricing principles and the skills needed in your day-to-day operations.

Ernst & Young Transfer Pricing University courses are taught by our leading national and local office transfer pricing professionals. Continuing professional education (CPE) credit is earned for each module completed. The full program consists of three modules, plus one module specifically for financial services professionals. The following courses are offered in Ernst & Young offices around the US throughout the year.

• Transfer Pricing 101 - The basics of transfer pricing
• Transfer Pricing 201 - Intermediate transfer pricing
• Transfer Pricing 301 - Advanced transfer pricing

Financial Services Transfer Pricing – A course specific to the financial services industry

All courses are complimentary; there is no registration fee or materials cost. Contact your local Ernst & Young Transfer Pricing professional or ITS.Marketing@ey.com for course schedules and program details. Let us help your in-house team achieve its potential.