Tag: Anticipated benefits

Condition requiring intra-group service charges or cost-sharing to be justified by demonstrable economic benefit to the recipient. Tax authorities challenge charges where no real benefit exists, particularly for passive association or group-name use. Addressed in OECD TPG Chapter VII.

TPG2022 Chapter IX paragraph 9.42

/ OECD Transfer Pricing Guidelines (2022), Options Realistically Available, TPG2022 Chapter IX: Transfer Pricing Aspects of Business Restructurings, Anticipated benefits, Business reasons, Business restructuring, Compensation for termination or renegotiation, Expected benefits, Reallocation of profit potential
In order to determine whether at arm’s length the restructuring itself would give rise to a form of compensation, it is essential to understand the restructuring, including the changes that have taken place, how they have affected the functional analysis of the parties, what the business reasons for and the anticipated benefits from the restructuring were, and what options would have been realistically available to the parties, as discussed in Section B ... Read more

TPG2017 Chapter IX paragraph 9.42

/ OECD Transfer Pricing Guidelines (2017), Anticipated benefits, Business reasons, Business restructuring, Compensation for termination or renegotiation, Expected benefits, Reallocation of profit potential
In order to determine whether at arm’s length the restructuring itself would give rise to a form of compensation, it is essential to understand the restructuring, including the changes that have taken place, how they have affected the functional analysis of the parties, what the business reasons for and the anticipated benefits from the restructuring were, and what options would have been realistically available to the parties, as discussed in Section B ... Read more
Germany vs "Group Name GmbH", August 2000, I R 12/99

Germany vs “Group Name GmbH”, August 2000, I R 12/99

/ Royalty and License Payments, Anticipated benefits, Group name, Marketing intangibles, Netherlands, Trade name
A German group company sought to deduct payments made for the use of the group name under transfer pricing rules. The German tax authority challenged the deductibility, and the court sided with the authority, ruling that no payment should be recognised for merely reflecting group membership. The 2000 decision aligns with OECD Transfer Pricing Guidelines on marketing intangibles and group name usage ... Read more