I’ve just been reading through the 2010 update to the OECD model tax treaty [pdf] and in particular the different positions set out by non-OECD countries. This is where countries can put on record their objections to the model treaty, so that potential treaty partners know what they’re getting themselves into. I think the difference… Continue reading On the BRICS’ choice of diplomatic language at the OECD
Tag: China
Five people who were missing from the Global Tax 50
We’re invited to comment on International Tax Review’s Global Tax 50. It says a lot about these annual trade press lists that four years before I appeared in the International Tax Review list I had featured in its equivalent in Drapers, which covers the fashion industry! Still, it’s a fun game, so let’s play it.… Continue reading Five people who were missing from the Global Tax 50
A great letter in this morning’s FT from a tax lawyer demonstrates not one but two points about the transfer pricing of royalty fees. The first is the way in which companies game the system:
The role of the tax expert was to identify the highest level of royalty that could be defended in attritional correspondence with the Inland Revenue. The lawyer’s role was to reach for the intellectual property precedents and draft licensing agreements, which bore the imprimatur of arms-length contracts although they were in reality no such thing.
Sometimes discussion of transfer pricing by campaigners obscures the difference between the blatent use of prices that are much lower or higher than should be permitted (this is true ‘transfer mispricing’, which is more akin to fraud) and the more common manipulation of prices to get the best tax position possible within the ‘arm’s length’ range.
Martin Hearson 