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Tax Planning

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musamiji's version from 2016-06-20 09:39

Section

Question Answer
What are the 5 methods of regulation?1. CUP (Comparable uncontrolled price) 2. Cost plus method 3. Resale price method 4. Profit split method 5. TNMM (Transactional net margin method)
Explain a CUP method exampleAs another example, assume a taxpayer sells 1,000 tons of a product for $80 per ton to an associated enterprise in its MNE group, and at the same time sells 500 tons of the same product for $100 per ton to an independent enterprise. This case requires an evaluation of whether the different volumes should result in an adjustment of the transfer price. The relevant market should be researched by analyzing transactions in similar products to determine typical volume discounts.
5 factors that affect comparability1. Characteristics of property or services 2. Functional analysis 3. Contractual terms 4. Economic circumstances 5. Business strategies
Action 13 (bullet points)1. Master file 2. Local file 3. Country-by-country report
memorize
Name the 11 factor list: 1. The labels on the documents evidencing the alleged indebtedness 2. The presence or absence of a maturity date 3. The source of payments 4. The right of the alleged lender to enforce payment 5. Participation in management 6. A status equal to or inferior to that of regular corporate creditors 7. The intent of the parties 8. The Adequacy of the (supposed) borrower's capitalization 9. Whether stockholders' advances to the corporation are in the same proportion as their equity ownership in the corporation 10. The payment of interest out of only "dividend money"; and 11.The borrower's ability to obtain loans from outside lenders