In the Seagate Tech case the US Tax Court was asked to decide on several distinct transfer pricing issues arising out of a transfer pricing adjustments issued by the IRS.
- Whether respondent’s reallocations of gross income under section 482 for the years in issue are arbitrary, capricious, or unreasonable;
- whether respondent should bear the burden of proof for any of the issues involved in the instant case;
- whether petitioner Seagate Technology, Inc. (hereinafter referred to as Seagate Scotts Valley), paid Seagate Technology Singapore, Pte. Ltd. (Seagate Singapore), a wholly owned subsidiary of Seagate Scotts Valley, arm’s-length prices for component parts;
- whether Seagate Scotts Valley paid Seagate Singapore arm’s-length prices for completed disk drives;
- whether Seagate Singapore paid Seagate Scotts Valley arm’s-length royalties for the use of certain intangibles;
- whether the royalty fee Seagate Singapore paid Seagate Scotts Valley for disk drives covered under a section 367 private letter ruling applies to all such disk drives shipped to the United States, regardless of where title passed;
- whether the procurement services fees Seagate Singapore paid Seagate Scotts Valley were arm’s length;
- whether the consideration Seagate Singapore paid Seagate Scotts Valley pursuant to a cost-sharing agreement was arm’s length; and
- whether Seagate Scotts Valley is entitled to offsets for warranty payments Seagate Singapore paid to Seagate Scotts Valley.
US-vs-SEAGATE-TECH-US-TC-149-1994