US vs EATON-CORPORATION, July 2017, US Tax Court, TC memo 2017-147

Posted on | By Courts of the US | No comments
Category: Legality - Legitimacy - Constitutional, MAP - APA | Tag: ,
« | »

The IRS decided to cancel two advance pricing agreements (APAs) with Eaton Corporation.

The US Tax Court ruled that this decision was an abuse of discretion.

US vs EATON CORPORATION AND SUBSIDIARIES, July 26 2017, United States Tax Court, TC memo 2017-147

Related Guidelines

OECD COVID-19 TPG paragraph 87 COVID-19 has led to material changes in economic conditions that were not anticipated when many APAs covering FY2020 and potentially future financial years affected by COVID-19 were agreed. Given this situation, it is important to determine to what extent, if any, the change in economic conditions affects the application of...
TPG2022 Chapter IV paragraph 4.150 APAs involving the competent authority of a treaty partner should be considered within the scope of the mutual agreement procedure under Article 25 of the OECD Model Tax Convention, even though such arrangements are not expressly mentioned there. Paragraph 3 of that Article provides that the competent authorities shall endeavour...
TPG2022 Chapter IV Annex II paragraph 7 It is important to distinguish the different types of APAs and so the bilateral or multilateral APAs, which are the main subject of this annex, are hereafter referred to as “MAP APAs”. The APAs that do not involve a mutual agreement negotiation are referred to as “unilateral APAs”. The generic...
TPG2022 Chapter IV paragraph 4.163 Concerns have also been expressed that, because of the nature of the APA procedure, it will interest taxpayers with a good voluntary compliance history. Experience in some countries has shown that, most often, taxpayers which would be interested in APAs are very large corporations which would be audited on a...
TPG2022 Chapter IV paragraph 4.158 Unilateral APAs may present significant problems for tax administrations and taxpayers alike. From the point of view of other tax administrations, problems arise because they may disagree with the APA’s conclusions. From the point of view of the associated enterprises involved, one problem is the possible effect on the behaviour...
OECD COVID-19 TPG paragraph 90 Yes, existing APAs and their terms should be respected, maintained and upheld, unless a condition leading to the cancellation or revision of the APA (e.g. breach of critical assumptions) has occurred. Taxpayers and tax administrations cannot automatically disregard or alter the terms of existing APAs due to the change in...
TPG2022 Chapter IV paragraph 4.152 Some countries lack the basis in their domestic law to enter into APAs. However, when a tax convention contains a clause regarding the mutual agreement procedure similar to Article 25 of the OECD Model Tax Convention, the competent authorities generally should be allowed to conclude an APA, if transfer pricing...
TPG2022 Chapter IV Annex II paragraph 1 Advance Pricing Arrangements (“APAs”) are the subject of extensive discussion in the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations at Chapter IV, Section F. The development of working arrangements between competent authorities is considered at paragraph 4.175: Between those countries that use APAs, greater uniformity in APA practices...
IRS – APA Study Guide issued in early 2000s In the early 2000s the IRS issued a “APA study guide” where guidance is provided in relation to various practical issues in the area of transfer pricing. The study guide is part of a large collection of IRS practices and statistics from working with MAP and APA that can be...
OECD Publishes Manual on Bilateral Advance Pricing Arrangement On 28 September 2022 OECD published a new manual for entering bilateral advance pricing arrangement (APA’s) which has been approved by the Inclusive Framework on BEPS, as well as all members of the FTA, on 6 July 2022. The Bilateral Advance Pricing Arrangement Manual (“BAPAM” or “Manual”) is intended as...

Leave a Reply

Your email address will not be published. Required fields are marked *