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New On The Network Today
This feed is published daily with selected new or updated
content from across our network. For a list of network sites, many of
which feature daily news, see below. |
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| 29/07 New
Lowtax Editor Column, by Kitty Miv |
| 28/07 New
PBTG Editor Column, Caroline, PBTG editor |
| 27/07 UK Launches Raft Of Tax Consultations, Tax-News.com |
| 26/07 Fat
Tax On The Menu
, Jeremy Hetherington-Gore blog entry |
| 23/07 Sarkozy Seeks 'Fiscal Convergence' With Germany, Tax-News.com |
| 20/07 Singapore
Base For Tuvalu OIFC, Tax-News.com |
| 19/07 Expats
Turn Backs On US Taxes, Tax-News.com |
| 16/07
Congress Approves US Financial Reform Bill, Tax-News.com |
| 15/07 New
Lowtax Editor Column, by Kitty Miv |
| 15/07 St
Vincent & The Grenadines, Investors Offshore special feature |
13/07 Tax-News.com
Jersey Review 2010-2011 |
| 12/07 Goodbye
To All That, Jeremy Hetherington-Gore blog entry |
| 09/07
Antigua Pursuing Trade Sanctions Against US, Tax-News.com |
| 08/07 New
Lowtax Editor Column, by Kitty Miv |
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06/07 Hong
Kong Full PBTG Guide, added to Personal Business Tax Guide |
| 05/07
Australian Mining Tax Agreement Reached, Tax-News.com |
| 02/07 Online
Trading For Expats, Investors Offshore special feature |
| 29/06 EC
To Extend Common System Of VAT, Tax-News.com |
| 28/06
Lowtax Dubai, annual update |
| 25/06 Jersey
Considers Tax Future, Tax-News.com |
| 22/06 VAT
Hiked In UK Emergency Budget, Tax-News.com |
| 21/06 Steady
Progress In TPP Negotiations, Tax-News.com |
| 18/06 Singapore
- Another Hong Kong?, Investors Offshore special feature |
| 15/06 Swiss
Parliament Approves UBS Agreement, Tax-News.com |
| 14/06 Ethical
Moonshine, Penelope Wise blog entry |
| 11/06 Germany
Purchases Stolen Tax Data Disc, Tax-News.com |
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08/06 Dubai
Full PBTG Guide, added to Personal Business Tax Guide |
| 07/06 G-20
Shelves Global Bank Tax, Tax-News.com |
| 04/06
Lowtax Panama, annual update |
| 01/06
Lowtax Luxembourg, annual update |
| 31/05
OECD And EU Strengthen Tax Cooperation, Tax-News.com |
| 28/05
Lowtax Guernsey, annual update |
| 25/05
Lowtax Jersey, annual update |
| 24/05 Lithuania
Summary PBTG Guide, added to Personal Business Tax Guide |
| 21/05
Lowtax Liechtenstein, annual update |
| 18/05 Latvia
Summary PBTG Guide, added to Personal Business Tax Guide |
| 17/05 Offshore
And The Euro, Jeremy Hetherington-Gore blog entry |
| 14/05 IO
Focus: Barbados, Investors Offshore special feature |
| 03/03
Personal Business
Tax Guide, PBTG, has launched! |
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| Providing essential tax news and information for globally
mobile artists, contractors, entrepreneurs, professionals, small businesses,
sportspersons and entertainers. |
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| Lowtax Network Sites |
| Lowtax Network Portal:
'Low-tax' business and investment in the top 50 jurisdictions covered in
exceptional detail. |
| Tax News: Global
tax news, continuously updated through the day. |
| Investors Offshore:
The independent offshore and alternative investment guide for expatriates
and the globally aware investor. Sponsored by HSBC
Bank International. |
| Law & Tax
News: Daily news and background data on tax and legal developments
for international business. |
| Offshore-e-com:
A topical guide to offshore e-commerce focused on tax and regulation. |
| Lowtax Library:
One of the web's largest and most authoritative business and investment
information sources. |
| US Tax Network:
The resource for free online US taxation information, covering: corporate
tax, individual tax, international tax, expatriates, sales and e-commerce
tax, investment tax. |
| NEW! Personal
Business Tax Guide: Providing essential tax news and information
on business for contractors, entrepreneurs, professionals, small businesses,
artists, sportspersons and entertainers. |
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Transfer Pricing Ruling A Deterrent To Over-Zealous Tax Departments,
by Mike Godfrey, Tax-News.com, Washington 14 May 2009
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A recent transfer pricing ruling by the Massachusetts Apellate Tax Board could
help to curb the over-zealousness of tax departments in making transfer-pricing
adjustments to boost tax revenues without due regard to best practice.
The Appellant was International Data Group (IDG), a company headquartered in
Massachusetts with 50 US and 62 overseas affiliates to which IDG provides accounting,
marketing and management services. IDG successfully fought off a tax assessment
that deemed they had undercharged their USD48m service charges to affiliates
by more than USD22m for tax years 1992-94. A 6-year tax audit that led to an
upwards assessment for tax and interest was thrown out in its entirety in a
judgement of April 17, 2009.
It was ruled that IDG received fair compensation for its administrative services, there being ample, credible evidence that it acted at arm's-length with
its subsidiaries in arriving at its fees.
The income adjustments made were fundamentally flawed - nearly all of IDG's
expenses were attributed incorrectly to the provision of services to its subsidiaries.
The extent to which IDG undertook work for its own benefit in identifying new
marketing opportunities was barely taken into account and it had made an assumption
that the directors' expenses in attending board meetings of subsidiaries was
an expense that should be invoiced to the subsidiaries whereas it was established
in the proceedings that the board meetings were primarily for the benefit of
IDG in its stewardship of the subsidiaries.
The appellants' expert witness, Dr. Irving Plotkin, highlighted the flaws
in the tax assessment. Dr. Plotkin stated that: "the threshold concern
is if there's been a transaction between A and B, has that been properly
priced. If there was no activity or if A did something which didn't benefit
B, there is no question of pricing. Once it has been determined
that a corporation has engaged in an activity which benefited a related corporation,
the next step in the analysis is to determine how much it would cost the beneficiary
of the activity to perform the activity itself or to procure the same services
from a third party." "This so-called make or buy analysis," explained
Dr. Plotkin, "is premised on the idea that in an arm's-length transaction,
a corporation would never pay more for services from an affiliate than it would
pay to an unrelated party or than it would cost to perform the services itself."
No such analysis had been made. Instead, the assessment was based on IDG's
own overall expenses. IDG's overall expenses were not an appropriate basis
for determining arm's-length charges because many of the activities in
which IDG engaged were not performed for the benefit of its subsidiaries.
The evidence included testimony and documents showing that other service providers
offered lower fees than IDG for providing the same administrative services as
well as the fact that IDG's subsidiaries had, at times, declined to contract
with IDG for the administrative services, opting instead to perform the services
for themselves or procure them from another provider.
Thus the methodology was not in accordance with Section 482 of the Massachusetts
tax code.
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| THE LOWTAX LIBRARY
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