1. Tax authorities continue to
increase their transfer pricing staffing. Taxpayers should not be complacent
about their transfer pricing risk.
2. The documentation burden is
growing, but taxpayers can take heart in the fact that a broad consensus exists
with respect to the arm’s-length principle and its application, even down to
years of testing and statistical measures employed. Method selection has become more flexible, with an almost
universal acceptance of net profit-based methods.
3. The increasing geographic scope
of documentation requirements and Organisation for Economic Co-Operation and
Development (OECD) developments impose an increasing benchmarking burden.
Nonetheless, tax authorities at least claim to be pragmatic with respect to the
acceptance of comparables from other markets.
4. Few tax authorities coordinate
the enforcement of transfer pricing standards with the enforcement of indirect
tax standards. The key exceptions are Estonia,
Peru, Portugal and Venezuela.
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