US vs Union Carbide, June 1998

Posted on | By Courts of the US | No comments
Category: Arm's Length Principle | Tag:
« | »

Union Carbide challenged and IRS ruling regarding its commission expenses, but the United States Tax Court granted the IRS’ cross-motion for partial summary judgement, ruling that the calculation was made correctly and that the temporary regulations on which basis the IRS had acted were valid.

 

US-UnionCarbide_decision_06151998

Related Guidelines

TPG2022 Chapter X paragraph 10.165 A similar issue arises in respect of cross-guarantees, where two or more entities in an MNE group guarantee each other’s obligations. From the lender’s perspective, it has access to the assets of every cross-guaranteeing entity in the event of a default by a guaranteed borrower. This potentially gives the lender...
TPG2022 Chapter IV paragraph 4.31 Paragraph 5 of Article 25, which was incorporated in the OECD Model Tax Convention in 2008, provides that, in mutual agreement procedure cases in which the competent authorities are unable to reach an agreement within two years of the initiation of the case under paragraph 1 of Article 25, the...
OECD COVID-19 TPG paragraph 23 Where possible, and on a temporary basis during the pandemic, tax authorities that otherwise use the price-setting approach could consider allowing taxpayers, for those controlled transactions affected by the pandemic, to take into account information that becomes available after the close of the taxable year in filing their returns (where...
OECD COVID-19 TPG paragraph 44 For example, assume that Distributor X purchases products, the controlled transaction, from a related party Company Y, and sells these products to third party customers. Further assume that a major customer of Distributor X does not pay for products purchased within its standard 30-day term, and that this causes a...
TPG2022 Chapter VII paragraph 7.11 In general, no intra-group service should be found for activities undertaken by one group member that merely duplicate a service that another group member is performing for itself, or that is being performed for such other group member by a third party. An exception may be where the duplication of...
OECD COVID-19 TPG paragraph 62 Job retention programmes have been used in many jurisdictions to preserve jobs in enterprises experiencing a temporary reduction in business activity.34 Examples of these programmes include short- term work programmes that directly subsidise hours not worked35 and wage subsidy programmes that subsidise hours worked or top up the earnings of...
OECD COVID-19 TPG paragraph 65 The terms and conditions of government assistance programmes related to COVID-19 need to be considered when determining the potential impact of these programmes on controlled transactions and when comparing their effects with those of other pre-existing assistance programmes. For instance, a number of COVID-19 assistance programmes are designed as temporary...
TPG2022 Chapter X paragraph 10.35 For example, independent lenders may be prepared to lend on terms and conditions to an enterprise undertaking a merger or acquisition which might otherwise not be acceptable to the lender for the same business if it were in a steady state. In this kind of scenario, the lender may take...
EU report on financial crimes, tax evasion and tax avoidance In March 2018 a special EU committee on financial crimes, tax evasion and tax avoidance (TAX3) was established. Now, one year later, The EU Parliament has approved a controversial report from the committee. According to the report close to 40 % of MNEs’ profits are shifted to tax havens globally...
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...

Leave a Reply

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