Original content provided by BDO
Tax authorities around the world have recently stepped up their scrutiny of intercompany financial transactions, in what they see as another front in their efforts to curb abusive transactions. Germany, for example, recently introduced comprehensive changes to its intercompany financing rules, effective 1 January 2024. However, the tax authorities may apply the new regulations to all open cases. The courts have also been involved, and have handed down decisions on the transfer pricing implications of intercompany loans. In the UK, HMRC has had recent success with a trio of cases, discussed in this issue, covering the topic of unallowable purpose, with three taxpayers having their interest deductions disallowed.
We include two other reports of significant transfer pricing court decisions – the recent Israeli court ruling in the eBay case and a Delhi High Court decision rejecting a transfer pricing adjustment made by the Indian tax authorities in a case involving royalty payments by an Indian subsidiary to its Korean parent company.
Jurisdictions around the world continue to refine their transfer pricing regimes. In this issue, we discuss the UK’s new Transfer Pricing Guidelines for Compliance, Singapore’s recently released 7th Edition Singapore Transfer Pricing Guidelines, and the UAE’s transfer pricing regime.