Читать книгу Transfer Pricing - Sebastian Schulz - Страница 14

Transfer pricing is a term that is also used in economics, so it is useful to see how economists define it. In business economics a transfer price is considered to be the amount that is charged by a part or segment of an organization for a product, asset or service that it supplies to another part or segment of the same organization. This definition is therefore consistent with the approach described above. The economic aspects result from or follow the functions of the ALP. If corporate profits are to be taxed where they are economically generated or where value is generated, and if it is to be ensured that the same competitive conditions apply between associated and unassociated companies, then economic considerations determine the respective profit that is to be allocated to the companies and taxed accordingly. Since there may be different views on this, the TPG and the UN-Manual, for example, should set out principles to find a solution in the international context that also allows double taxation to be avoided.

The ALP requires a comparison of the terms and conditions between related parties to the terms and conditions between unrelated parties in a comparable situation and an analysis of the effect on the profit. For example, Article 9 (1) OECD-MTC refers to conditions agreed or imposed between associated enterprises which differ from those which independent enterprises would agree for their commercial or financial relations. It is therefore a question of the conditions which are within the control of the associated enterprises and which can be agreed accordingly or imposed by one party. The external circumstances which cannot be influenced are therefore not the subject of the ALP. They are to be assumed as given and their effects are to be considered when conducting the ALP. The consequence of this is a kind of limited ALP and not a fiction of completely independent enterprises. The latter would also be contrary to the principle of ensuring a level playing field, as completely incomparable facts would be compared fictitiously.

According to this provision, it cannot be ignored when conducting the ALP that the associated enterprises belong to an MNE group and for this reason alone other circumstances, such as increased transparency of information or legal regulations that only apply to MNE groups, must be considered.

However, it is questionable whether the ALP should be based on comparable market transactions (market approach or concrete arm’s length comparison) or whether hypothetical considerations (intended economic target behaviour) should be made based on internal data. At the very least, a comparison based on commercial or financial relations is required. Accordingly, the actual facts of the case must be determined, which must then be compared or economically assessed. If market data exists, this could provide a verifiable and objective measure of value.

Apparently, the US in 1968 and the OECD in its 1979 report had assumed that reliable comparable data could be found in sufficient numbers. Even today, market data and the so-called comparability analysis (Chapter III of the TPG) are still considered to be extremely important against the arm’s length background. According to this analysis, a comparison of an intra-group transaction (controlled transaction) with an external transaction or transactions (uncontrolled transaction) is to be made. However, the question of the comparability of the data arises. The TPG state in this respect that intra-group transactions are comparable with transactions with third parties if none of the differences between the transactions can materially affect the factor examined by the method (e. g. price or margin) or if sufficiently precise adjustments can be made to eliminate the material effects of these differences (see TPG glossary regarding comparability analysis).

In practice, in order to verify the arm’s length nature of transfer prices, it is sometimes necessary to compare the key return figures of comparable independent entities with the key return figures of the entity concerned – so called tested party. In order to determine these return ratios of independent entities, publicly accessible databases are used and so-called benchmark analyses are prepared. However, these allow for a large and sometimes arbitrary range of comparables. In addition, the quantitative assessment and pricing of the association to the MNE group causes difficulties – especially the recognition and the impact of synergies, network effects and information symmetries -, as these cannot be determined by market data. Hence, in practice no adjustment calculations are made in this respect. Also, the value-chain process of the MNE group is ignored when considering individual transactions or the key return figures in isolation. However, this is a basic prerequisite for taxing corporate profits where they are generated economically or where the value is generated. An unreflected comparison of facts which are not comparable per se (associated versus independent enterprises) therefore lacks the functions of the ALP and also leads to misallocations and tax planning potential.

By the same token, economic reason and the use of commercially reasonable techniques recognized by the expert community should not be ignored in order to demonstrate the proper application of the ALP. If the associated enterprises are associated with each other within the meaning of Article 9 (1) OECD-MTC, the expression would agree proves that the ALP to be applied is based on a hypothetical model. Independence is assumed to exist, which in fact does not exist. However, this does not go so far as to ignore the fact that the associated enterprises belong to an MNE group. Only the conflict of interests has to be considered between the associated enterprises.

A strictly transaction-based analysis and an isolated consideration of the individual transactions from an economic point of view is hardly possible. Nor does the wording of Article 9 (1) OECD-MTC provide for a focus on the transaction in question; rather, the focus is on the profit of an associated enterprise, even if the TPG repeatedly stipulates a transaction-oriented approach.

It is therefore necessary to identify and assess the situation within the MNE group. As a result, one has to familiarize oneself with the MNE group and its value chain, value network or value shop and a complete value chain analysis has to be carried out. In this way, the external circumstances that cannot be influenced are properly included in the arm’s length analysis. Only then it is possible to assess how third parties would have assessed the facts and whether there is a misallocation of profits.

A step in this direction is being taken within the TPG with the transactional profit split method (TPSM), especially in the form of contribution analysis. Under this method, the total profit from intra-group transactions is divided between the associated enterprises on the basis of the relative value of the functions performed by the individual enterprises involved in the transactions (taking into account the assets used and the risks assumed). This method is based primarily on internal data, and within this method, so-called valuation techniques such as capitalized earnings value or discounted cash flow methods can also be applied. Certainly, such an economically sound approach is provided with subjective latitude and may therefore arouse scepticism among the parties involved and seem to complicate the application of ALP. However, the recourse to market data (in the form of arm’s length transactions) is neither legally mandatory nor less subjective. However, this approach is the prevailing opinion and is at least the standard in the TPG.

Nevertheless, it is of crucial importance to have fully identified and assessed the facts and circumstances and to assess them from an economically sound point of view. Only then a lasting and convincing line of argumentation can be established in the context of an audit.