Submitted by JOSIANE SANTOS DE OLIVEIRA (josianeso) on 2019-02-04T12:06:57Z No. of bitstreams: 1 Gabriela Auler_.pdf: 1514282 bytes, checksum: fc1188e940405f41fb4189ff076e5fc3 (MD5) / Made available in DSpace on 2019-02-04T12:06:57Z (GMT). No. of bitstreams: 1 Gabriela Auler_.pdf: 1514282 bytes, checksum: fc1188e940405f41fb4189ff076e5fc3 (MD5) Previous issue date: 2018-10-19 / Nenhuma / Dentre os principais problemas enfrentados pela globalização está a harmonização tributária. A dificuldade para conciliar sistemas tributários diversos é imensa. Nesse ínterim, tampouco, se evidenciam os conflitos atinentes às regras de preço de transferência, as quais, frisa-se, têm maior impacto tributário sobre as rendas geradas internacionalmente do que qualquer outro aspecto da legislação tributária. Nesse contexto, procurou-se, por meio do presente trabalho, compreender melhor os padrões, princípios e métodos utilizados internacionalmente para fins de cálculo do preço parâmetro de transferência, partindo-se de uma análise internacional evolutiva quanto ao tema para, então, tratar de forma pormenorizada sobre ao princípio arm’s length e efeitos decorrentes de sua aplicação. Após, discorreu-se sobre os preços de transferência no direito brasileiro, de sorte a abordar sua evolução, métodos utilizados para cálculo e a (não) utilização do princípio arm’s length em decorrência da utilização de margens predeterminadas. Ainda, analisou-se o posicionamente da ONU quanto a tal fato e as decisões do CARF e STJ referentes ao tema. Por fim, discorreu-se acerca da possibilidade e relevância na implementação do princípio arm’s length à legislação brasileira, elucidando as supostas dificuldades e alternativas existentes, com o viés de se chegar a um cenário mais próspero e favorável aos negócios internacionais, o qual deve trazer previsibilidade e segurança aos respectivos investidores/empresas. / One of the main problem faced by globalization is tax harmonization. The difficulty of reconciling different tax systems is immense. In this context, conflicts related to transfer pricing rules have a greater tax impact on revenues generated internationally than any other aspect of tax legislation. This study aim to understand the standards, principles and methods used internationally for the purpose of calculating the transfer price value. The study starts with an international evolutionary analysis on the subject and the detailed description of the arm's length principle and the effects of its application. Afterwards, it discusses about transfer pricing in Brazilian law, it’s evolution, methods used for calculation and the (non) use of the arm's length principle due to the use of predetermined margins. The position of the UN on this fact was also addressed and approached the decisions of CARF and STJ on the subject. Finally, it discusses about the possibility and relevance of implementing the arm's length principle to Brazilian legislation, elucidating the difficulties and alternatives, with the scope of creating a prosperous and favorable scenario for international business, which should bring predictability and security to the companies/investors.

The purpose of this master’s thesis is to explain and analyze whether today’s existing regulations provide sufficient guidance on how to apply the Profit Split Method (PSM) in practice. Since the enterprises’ profits arising from intra-group transactions increases, the tax base for any government also becomes larger and more important. This issue will likely become even more problematic as the globalization branches out and the majority of the global trade is undertaken between associated enterprises. In order to satisfy all parts and serve the dual objective of securing an appropriate tax base in each jurisdiction and avoiding double taxation, one ambition of the OECD is to harmonize the transfer pricing rules and make them become more uniform. An area in which this goal can be accomplish is at an international level such as the OECD; an important developer in the field of transfer pricing. Different transfer pricing methods has been developed which can be applied by both taxpayers and tax authorities to determine a correct transfer price. Six of these methods has gained international acceptance, although to a more or less extent among various countries, and one of these methods is the PSM. In the years between 1979 and 1995, the OECD had a reluctant standpoint of accepting the application of any transfer pricing method based on profits, such as the PSM. This hesitant viewpoint changed in the existing TPG which explicitly stipulates that the PSM could provide a transfer pricing estimation in accordance with the ALP, which should be accepted in exceptional cases. There are certain situations where a PSM possibly will provide the most appropriate arm’s length result. Since the principle of economics can create complex business environments of both vertical and horizontal integration, contributions of valuable intangibles on both sides of the cross-border transaction, the PSM might be the only method which can be employed. A relevant issue which need to be enlightened is whether the existing guidance provided by the OECD and USA is sufficient from a practitioners and tax administration point of view, or is more guidance needed to better understand the issues surrounding the concept of the PSM. The fact that OECD insist of using comparables to the highest extent as possible when employing the PSM entails practical problems, since it is rather a rule than an exception that reliable comparables cannot be found when valuable intangibles are involved. The Arthur of this master’s thesis has identified three key conclusions which might facilitate how PSM issues can be handled in the future and improve the existing PSM guidance. These conclusions are the need for a uniform PSM interpretation, the need for additional flexibility and acceptance, and the need for additional TPG guidance.

Problem description: This study of relationship embeddedness in the construction industry is conducted within the network of the case company Peab AB and limited to their project operations in Finland. The industrial marketing theories, sociological embeddedness theories and construction industry characteristics are forming the foundation of the theoretical framework. The current academic literature has revealed two contradictive approaches of favorable level of relationship embeddedness in the construction industry setting. Therefore, this thesis aims to reveal how embeddedness from structural and relational perspective influences to Peab network relationship development by example of two projects and whether they are developing towards the embedded, high-involvement and closer or arm’s length type of relationships. Purpose of the research: The purpose of this paper is to examine how embeddedness from structural and relational perspective influences relationship development and to reveal which level of embeddedness is favored in the construction industry network by examining two projects of Peab AB. Research question: How does embeddedness influence Peab’s business relationships within its existing network in the construction industry? Methods: This study consists of qualitative research with a case study method, where the chosen case company is Peab AB. The empirical data was gathered by conducting five semi-structured in-depth interviews from the key persons of two different construction projects including the top managers of Peab Foundation Sweden and Peab Infra, Peab Industry/MBR and Tensicon. Interviews revealed in detail two different project conditions from bidding process, selecting the subcontractors, actual performance and adjustment requirements and conditions for cost related and loyal relationship conditions. The theory part in this research consists of theories concerning industrial marketing, construction industry characteristics and sociological theories that were searched through carefully selected academic articles, journals, books and e-books. Conclusion: The Peab network supports closer internal ties and longer-term-oriented external ties, and therefore, the internal ties tend to become stronger compared to the external ties. Structural and relational embeddedness are complimenting and overlapping perspectives and it is recommendable to consider both dimensions when examining relationship development. It should be noticed that the embeddedness has many variations and levels, and therefore, the network and the industry conditions should be examined thoroughly as they all influences the business relationship development. In the Peab network the low price and close relationship goes hand in hand. Nearly always the lowest price determines who gets the project, but through the trusted relationship the price can be adjusted.

<p>The purpose of this master’s thesis is to explain and analyze whether today’s existing regulations provide sufficient guidance on how to apply the Profit Split Method (PSM) in practice. Since the enterprises’ profits arising from intra-group transactions increases, the tax base for any government also becomes larger and more important. This issue will likely become even more problematic as the globalization branches out and the majority of the global trade is undertaken between associated enterprises.</p><p>In order to satisfy all parts and serve the dual objective of securing an appropriate tax base in each jurisdiction and avoiding double taxation, one ambition of the OECD is to harmonize the transfer pricing rules and make them become more uniform. An area in which this goal can be accomplish is at an international level such as the OECD; an important developer in the field of transfer pricing. Different transfer pricing methods has been developed which can be applied by both taxpayers and tax authorities to determine a correct transfer price. Six of these methods has gained international acceptance, although to a more or less extent among various countries, and one of these methods is the PSM. In the years between 1979 and 1995, the OECD had a reluctant standpoint of accepting the application of any transfer pricing method based on profits, such as the PSM. This hesitant viewpoint changed in the existing TPG which explicitly stipulates that the PSM could provide a transfer pricing estimation in accordance with the ALP, which should be accepted in exceptional cases.</p><p>There are certain situations where a PSM possibly will provide the most appropriate arm’s length result. Since the principle of economics can create complex business environments of both vertical and horizontal integration, contributions of valuable intangibles on both sides of the cross-border transaction, the PSM might be the only method which can be employed. A relevant issue which need to be enlightened is whether the existing guidance provided by the OECD and USA is sufficient from a practitioners and tax administration point of view, or is more guidance needed to better understand the issues surrounding the concept of the PSM. The fact that OECD insist of using comparables to the highest extent as possible when employing the PSM entails practical problems, since it is rather a rule than an exception that reliable comparables cannot be found when valuable intangibles are involved.</p><p>The Arthur of this master’s thesis has identified three key conclusions which might facilitate how PSM issues can be handled in the future and improve the existing PSM guidance. These conclusions are the need for a uniform PSM interpretation, the need for additional flexibility and acceptance, and the need for additional TPG guidance.</p>

South Africa, together with similar countries world-wide, has taken active steps to counter the negative effects of the concept of “Base Erosion and Profit Shifting” by tightening its transfer pricing legislation. The South African 2010 Taxation Laws Amendment Act includes certain changes to bring the transfer pricing rules contained under section 31 of the Income Tax Act no 58 of 1962 up to date. These changes are aimed at bringing the South African transfer pricing legislation in line with the Organisation for Economic Cooperation and Development (OECD) guidelines. The new section 31 is aimed at shifting focus from the old transaction-based wording, to a more substance-focused approach. This implies, therefore, that safe harbours will no longer be the main determinant in establishing whether or not a company is thinly capitalised. The major concerns raised by taxpayers regarding this new approach relate to the uncertainties with regard to its practical application. Thus, the new amendments have brought about various challenges, including, the standardisation of procedures, reducing the cost of compliance, and developing broad databases that can assist with the determination of the arm's length price. This study aims to analyse the practical difficulties with which taxpayers could be faced in the application of this new legislation. The study uses the United Kingdom to assess the effectiveness of the new thin capitalisation rules since their thin capitalisation provisions also appear to have been brought in line with the OECD guidelines. / Dissertation (MCom)--University of Pretoria, 2014. / Taxation / unrestricted

This study serves to critically assess the effectiveness of South Africa’s thin capitalisation framework in dealing with Base Erosion and Profit Shifting (BEPS) through excessive interest deductions by multinational enterprises (MNEs). Given the impact of globalisation in interconnecting economic activities across multiple countries, BEPS presents a major policy concern both internationally and domestically. Thin capitalisation, a situation in which an entity utilises to their tax benefit the deductions/exemption mismatch that arises from crossborder debt financing, is one of the most common methods of BEPS utilised by MNEs. This study aims to ascertain whether the framework is effective in dealing with thin capitalisation whilst balancing the need to attract investment and boost economic development and, to assess whether the framework is reflective of South Africa’s contextual realities. It achieves this by engaging with the South Africa’s legislative framework consisting of s 31 and s 23M of the Income Tax Act and the Draft Note on Thin Capitalisation and their relationship with international tax norms and standards. The study relies on the Organisation for Economic Cooperation and Development (OECD) to identify the international standards and contrasts South Africa’s framework with Canada, a developed and OECD member state. The study concludes that the framework is fraught with uncertainties and administrative difficulties that hinder its effectiveness. It also concludes that the framework’s reliance on the OECD’s standards is misguided and does not reflect South Africa’s contextual realities. This is a stark contrast to Canada which opted for a thin capitalisation approach outside the OECD’s recommendations which more reflects its context. The study thus concludes that South Africa’s thin capitalisation framework is ineffective in dealing with BEPS by way of thin capitalisation.

Base erosion in the form of profit shifting has become an increasing concern internationally as well as in South Africa. A significant type of base erosion in South Africa is in the form of excessive interest deductions where income is effectively shifted to a no-tax or low-tax jurisdiction. One of the key developments affecting the South African tax laws was the introduction of provisions that target base erosion and profit shifting. Included in these provisions is section 23M, which limits the deduction of interest paid to persons in whose hands the interest received is not subject to tax in South Africa. It was, however, identified that section 23M may target the same interest risks that the new section 31 thin capitalisation provisions address. Section 23M was said to be the enactment of thin capitalisation. Although one of the purposes of tax treaties is to encourage international trade and investment, there is also discriminatory taxation, which runs counter to that purpose and therefore the prevention of such discrimination is important when dealing with tax treaties. The Organisation for Economic Cooperation and Development’s (OECD) Model Tax Convention contains a handful of special criteria in article 24, which must not lead to different or less favourable treatment with regard to taxation. It was found that the non-discrimination article, in particular articles 24(4) and 24(5), may prevent the application of a thin capitalisation regime if the provisions are in contrast with the OECD non-discrimination provisions. Article 24(4) and article 24(5), however, contain an exception that the non-discrimination provisions would not be applicable provided that the thin capitalisation regimes are compatible with the arm’s length principles of article 9. If section 23M was therefore found to be an arm’s length transaction, the article 24(4) and (5) non-discrimination provisions would without further consideration, not be applicable. It was, however, found that section 23M does not consider the factors that should be considered when an arm’s length transaction is applicable, but merely applies the same formula to each company regardless of the size of the company or the industry sector. As a result of this, it appears as if section 23M is arbitrary in nature and therefore would not represent an arm’s length transaction. The exception would not be applicable and would therefore increase the potential non-compliance with the non-discrimination provision. The objective of this study was to determine whether any aspect of section 23M would be contrary to the OECD guidelines relevant to thin capitalisation and in particular the non-discrimination provisions. It was, however, found that although it appears as if section 23M’s primary focus is on cross-border transactions, the provisions do not directly discriminate on the basis of residence. As a result of the discrimination being indirect discrimination and the fact that the cause of section 23M being applicable is not foreign ownership, but rather due to the creditor not being subject to tax, it was concluded that the OECD non-discrimination provisions would not be applicable to section 23M. / MCom (South African and International Tax), North-West University, Potchefstroom Campus, 2015

Base erosion in the form of profit shifting has become an increasing concern internationally as well as in South Africa. A significant type of base erosion in South Africa is in the form of excessive interest deductions where income is effectively shifted to a no-tax or low-tax jurisdiction. One of the key developments affecting the South African tax laws was the introduction of provisions that target base erosion and profit shifting. Included in these provisions is section 23M, which limits the deduction of interest paid to persons in whose hands the interest received is not subject to tax in South Africa. It was, however, identified that section 23M may target the same interest risks that the new section 31 thin capitalisation provisions address. Section 23M was said to be the enactment of thin capitalisation. Although one of the purposes of tax treaties is to encourage international trade and investment, there is also discriminatory taxation, which runs counter to that purpose and therefore the prevention of such discrimination is important when dealing with tax treaties. The Organisation for Economic Cooperation and Development’s (OECD) Model Tax Convention contains a handful of special criteria in article 24, which must not lead to different or less favourable treatment with regard to taxation. It was found that the non-discrimination article, in particular articles 24(4) and 24(5), may prevent the application of a thin capitalisation regime if the provisions are in contrast with the OECD non-discrimination provisions. Article 24(4) and article 24(5), however, contain an exception that the non-discrimination provisions would not be applicable provided that the thin capitalisation regimes are compatible with the arm’s length principles of article 9. If section 23M was therefore found to be an arm’s length transaction, the article 24(4) and (5) non-discrimination provisions would without further consideration, not be applicable. It was, however, found that section 23M does not consider the factors that should be considered when an arm’s length transaction is applicable, but merely applies the same formula to each company regardless of the size of the company or the industry sector. As a result of this, it appears as if section 23M is arbitrary in nature and therefore would not represent an arm’s length transaction. The exception would not be applicable and would therefore increase the potential non-compliance with the non-discrimination provision. The objective of this study was to determine whether any aspect of section 23M would be contrary to the OECD guidelines relevant to thin capitalisation and in particular the non-discrimination provisions. It was, however, found that although it appears as if section 23M’s primary focus is on cross-border transactions, the provisions do not directly discriminate on the basis of residence. As a result of the discrimination being indirect discrimination and the fact that the cause of section 23M being applicable is not foreign ownership, but rather due to the creditor not being subject to tax, it was concluded that the OECD non-discrimination provisions would not be applicable to section 23M. / MCom (South African and International Tax), North-West University, Potchefstroom Campus, 2015

The purpose of this master’s thesis is to examine and analyse how a transfer pricing adjustment is made and how related parties should handle price adjustments from a customs perspective in Sweden. The examination includes describing the valuation methods available for transfer pricing and customs valuation with regards to related parties. In addition, the differences in connection to the valuation are described and analysed. Goods imported to Sweden must be cleared through customs: the importer presents a customs declaration to the Swedish Customs and pays customs duty. The customs duty is calculated using a customs value and customs valuation is the system that enables the importer to establish correct customs values on imported goods. Transfer pricing is the determination of prices on transactions taken place between companies belonging to the same group and has a direct effect on the income tax payable. There are six customs valuation methods that are hierarchically applied and six transfer pricing methods that are applied somewhat differently. There are similarities between the methods and most of the customs valuation methods have a corresponding transfer pricing method, or vice versa. Even if there are similarities, many factors make reconciliation of the methods difficult. Such factors are the different time for assessing the value and that the customs valuation methods are applied in a strictly hierarchical way with no possibility to choose the most suitable method. Customs duties and transfer pricing both share the same valuation concept, although interpreted differently, being that the value shall be based on the price that the parties would arrive at under open market conditions. However, relevant values on the same transaction differ significantly due to trying to be in accordance with respective rules. The differences in expectations and the conflicting interests on the outcome of the valuation lead to problems in the tax field. As a conclusion, customs valuation and transfer pricing can undeniably be described as “the two opposing and necessary sides of the same ‘coin’, whose respective values unavoidably affect the whole balance of a system of closely connected valuation”. In order for related parties to use the transaction value method, which is the superior customs valuation method, the price must not have been influenced due to their relationship. If one of two tests prescribed by law can prove that the relationship has not influenced the price, the related parties can use the transaction value method to establish the customs value. If the transaction value, for some reason cannot be used, the importer has to address other options on to how to establish the customs value. The conclusion of this master’s thesis is that related parties should include a price review clause in their contract or pricing policy. The company should notify the Swedish Customs about the provisional price and make an incomplete customs declaration. When information enabling the calculation of the customs value is available, the importer should file a complementary declaration. As an alternative, the importer should declare an open claim to the Swedish Customs arguing that the transaction value cannot be applied and, as a consequence thereof, explain in the customs value declaration why the applied customs value is correct. This thesis provides three recommendations concerning how to deal with the complications of customs valuation and transfer pricing. The first recommendation is that rules and recommendations surrounding transfer pricing and customs valuation should, to the extent possible, be harmonised. The second recommendation is that co-operation between the Swedish Tax Agency and the Swedish Customs must improve, for example through advance pricing arrangements for both transfer pricing and customs purposes, documentation requirements, and joint audits. The third recommendation is that related parties should take the same care and documentation approach for customs purposes as it does for transfer pricing. Importing companies should make a price review clause in their contract before the importation and present an incomplete customs declaration. This way, in case of adjustments, the related party is able to uphold an arm’s length standard on the price and has the possibility to use the preferred transaction value for customs purposes, if that is desirable.

När relaterade bolag belägna i olika länder säljer varor och tjänster sinsemellan kan det av olika anledningar ske till ett pris som avviker från det marknadsmässiga. Det kan bero på skatteplanering, men också på diverse andra omständigheter. För att kunna fastställa vilket som är rätt marknadspris och därigenom kunna ta ut rätt skatt är de flesta länder bundna av dubbelbeskattningsavtal, som vanligtvis är utformade efter OECD: s modellavtal. I artikel 9 i detta modellavtal finns regler om internprissättning och där definieras ”Armlängdsprinci-pen”, som säger att prissättningen ska följa de marknadsmässiga principerna. Vid en från marknadspris avvikande prissättning måste det konstateras om bolagen är relaterade eller ej, då reglerna för internprissättning endast gäller relaterade bolag. Enligt OECD: s modellav-tal kan bolag vara relaterade på grund av kontroll genom kapital, ledning eller annan kon-troll, och det är det sista kriteriet, begreppet ”annan kontroll”, som skapar störst förvirring. Varken OECD: s artikel 9 eller modellavtalet som sådant innehåller någon definition av be-greppet och det står inte heller att läsa hur de tre kriterierna förhåller sig till varandra. Vida-re saknas vägledning om vilka situationer som omfattas av artikeln. Enligt Art 3(2) i modellavtalet ska odefinierade termer tolkas enligt nationell lagstiftning om inte omständigheterna kräver annorlunda. Art. 9 ges ofta en vidare definition än den given i OECD:s modellavtal, vilket kan resultera i en inkorrekt skattesituation. Eftersom dubbelbeskattningsavtalet endast rör justering av dubbelbeskattning, kan en justering inte äga rum genom användande av modellavtalet. Genom att utvidga beskattningsrätten, bryter länderna mot den gyllene regeln, vilken de flesta dubbelbeskattningsavtal bygger på, att ett dubbelbeskattningsavtal aldrig kan användas för att utvidga beskattningsrätten, endast in-skränka denna. Syftet med uppsatsen är att undersöka hur man kan ge kontrollbegreppet en riktig definition som överensstämmer med Art. 9. Eftersom tolkning via nationell lag kan ge oönskade resultat, kräver omständigheterna ett annorlunda tolkningssätt. Genom att ge kontrollbegreppet en autonom konventions tolkning som reflekterar syftet och bakgrunden till Art. 9, undviks problemet. / When associated enterprises situated in different countries sell goods and services between themselves, the transfer price may, because of different reasons, diverge from the market price. The divergence may be a consequence of tax planning, but it may also arise from other circumstances. To determine the right market price and thereby be able to make a correct taxation, most countries are committed to double taxation agreements, which are usually designed after the OECD Model Convention (hereafter OECD MC). Art. 9 of the convention provides for transfer pricing regulations and in this article the “arm’s length principle” is defined, stating that the pricing should be set according to the market price principles. When the transfer price diverges from the market price it must be established if the enterprises are associated or not, since the transfer pricing regulations only applies to associated enterprises. According to the OECD MC enterprises may be associated through capital, management or control, and it is the last notion, the notion of “control” that creates the greatest confusion. Neither in Art. 9 nor in the rest of the OECD MC, a definition of the notion exists, and it is nowhere stated how the criteria relate to each other. Further-more, guidance is missing describing in which situations the article is meant to be applica-ble. According to Art. 3(2) OECD MC, undefined terms shall be interpreted according to domestic law, unless the context otherwise requires. Art. 9 is often given a wider definition than the one provided in the OECD MC when domestic interpretation is used, which may result in an incorrect tax situation. Since the double taxation agreement only deals with the adjustment of double taxation, an adjustment cannot be justified by the use of the OECD MC. By broadening the scope of the article, the countries break the golden rule upon which most double taxation agreements rely, that a double taxation agreement may never be used to expand the right of taxation, only restrict it. The purpose of the thesis is to investigate how to give the term control an appropriate definition in line with Art. 9. Since the use of domestic interpretation may give unwanted results, the context requires an alternative way of interpretation. By giving the notion of control an autonomous treaty interpretation that reflects the purpose and context of Art. 9, the problem is avoided.