ONESOURCE Transfer Pricing thomsonreuters.com

Source: PATRICE MARCEAU AND DANIEL CHAN (DLA PIPER, CHINA)

If one had to define in one word (or two!) the main trend in PRC tax in the last few months, "anti-avoidance" would be it. In recent months, we have seen in succession: two local tax bureau decisions attacking the integrity of treaty-based holding structures, the long-awaited circular from the State Administration for Taxation (SAT) on special adjustments, including transfer pricing, and a notice from the SAT addressing specifically anti-avoidance with respect to the payment of dividends to a tax treaty jurisdiction entity.

The trend is definite and shows that the PRC is fast catching up on tax avoidance, learning to use every tool in the box to counter what it perceives to be abusive tax planning.

Source: Jose Palacios, Pedro Saavedra, Mario Ortega, and Antonio Pereira Jose Palacios, Pedro Saavedra, Mario Ortega, and Antonio Pereira are with Garrigues Abogados y Asesores Tributarios. Members of the firm regularly cover developments in Spain for the Journal.

In 2008, the Spanish transfer pricing rules included in the Corporate Income Tax Law (mainly in Article 16) were amended completely for fiscal years commencing after November 30, 2006.  The new rules on transactions between related parties had been awaiting implementation since late 2006. The new Regulations cover determination of normal market value of related-party transactions: comparability analysis; documentation obligations in related-party transactions; cost contribution arrangements; secondary adjustments; APAs; and verification of normal market value of related-party transactions.

Source: Baker & McKenzie North America Transfer Pricing Group

Although the Temporary Regulations retain virtually all of the concepts and methods of the 2005 Proposed Regulations, they also contain several refinements to those proposals. Moreover, the Temporary Regulations introduce transition rules for existing CSAs that are less draconian than the transition rules of the 2005 Proposed Regulations. The Temporary Regulations, like the 2005 Proposed Regulations, are a radical departure from the 1996 cost sharing Regulations and transfer pricing case law, and are likely to reduce substantially the attractiveness of new CSAs to taxpayers.

Source: Bob Ackerman, David J. Canale, Karen Kirwan, Carlos Mallo, Mike Patton, Leigh Anne Pasak and Peyton Robinson (Ernst & Young LLP)

Transfer pricing will undoubtedly become a more significant focus of attention for the Internal Revenue Service (IRS) in their examinations of multinational corporations (MNCs). In a statement regarding international tax reform on May 4, 2009, President Obama announced that the IRS will "hire nearly 800 more IRS agents" to increase international tax enforcement efforts. Concurrent with his remarks, the White House issued a press release commenting on the President's proposal, indicating that the budget would provide the IRS with funds "to hire new agents, economists, lawyers, and specialists, increasing the IRS's ability to crack down on offshore tax avoidance, often done through transfer pricing and financial products."