The EdgarStat Blog explores issues in transfer pricing and application of the transactional net margin method (TNMM or CPM in the US) and other enterprise profit-based methods. Blog writings reflect the position of the authors and are not the opinion of EdgarStat.
The IRS has recently asserted implicit support in several situations where a foreign based affiliate extended an intercompany loan to a US borrowing affiliate. In this piece, we'll discuss an intercompany loan involving Perrigo, and compare the IRS settlement to the litigation involving GE Capital Canada before we turn to another potential IRS issue.
Topics: US Internal Revenue Service Intercompany Guarantee Fees Intercompany Financing Intercompany Loans US Transfer Pricing Canada Revenue Agency
Read moreThis discussion presents a simplified illustration of the issues with respect to the unspecified method applied in Medtronic III in contrast to the IRS' extreme CPM approach and a traditional RPSM approach based on sound financial economics.
Topics: Residual Profit Split Method Unspecified Method Intangibles Medtronic Tax Controversy Tax Policy Section 482 US Internal Revenue Service TNMM/CPM US Transfer Pricing
Read moreUse of the CPM/TNMM to determine royalty rates for valuable intangibles in transfer pricing is incompatible with basic financial economics.
Topics: DEMPE OECD Guidelines Intangibles Royalty Rates Tax Policy US Internal Revenue Service TNMM/CPM
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