<p>This master’s thesis deals with the transfer pricing of intangibles and focuses on the U.S. standard commensurate with income. This standard has been accused of being incompatible with the overriding principle of transfer pricing, the arm’s length standard, and is not endorsed by the OECD. Recent developments on the topic include the introduction of a similar provision in Germany. The purpose is to evaluate the standard’s compatibility with the arm’s length standard and to establish the current position of the concept of commensurate with income.</p><p>To meet this purpose the thesis first describes the inherent problems surrounding transfer pricing of intangibles as well as provides a background to transfer pricing in the U.S. The focus then shifts towards the history, application and criticism of the commensurate with income standard. The thesis also gives an account of the OECD’s and Germany’s positions on the matter. In the final analysis the compatibility with the arm’s length standard is examined from two angles; the commensurate with income standard’s valuation approach on one hand and its use of hindsight on the other.</p><p>The commensurate with income standard uses an income approach to valuation of transfers of intangibles instead of the market approach recommended by the OECD. This may lead to overvaluation of intangibles and is not strictly in line with the arm’s length standard. The German commensurate with income provision is more in line with the market approach and is therefore more compatible with the arm’s length standard in this aspect.</p><p>The commensurate with income standard allows adjustments to transfer prices with the benefit of hindsight. The actual income from a transferred intangible is thus used as evidence as to whether or not the original transfer price was set reasonably. The OECD is of the opinion that only information known at the time of the transfer should be used, but makes an exception for the particular situation when a tax authority can prove that unrelated parties would have adjusted transfer prices retroactively. The point made here is that the commensurate with income standard places the burden of proof on the taxpayer, while the OECD places it on the tax authority. This allows the OECD to stay true to the arm’s length standard, while the U.S. and Germany deviates somewhat from it.</p><p>However, there is no exact manner in which to define the arm’s length standard, and even the OECD deviates from it more or less. The commensurate with income standard may be one step further away from the purest definition of it but not a complete deviation. The German version of commensurate with income manages to target the same problem while staying closer to the arm’s length standard. Germany has thereby found a middle way and might hold the solution to finding a consensus between the OECD and the U.S.</p>

This master thesis examines the issues surrounding the pricing of intra-group loans. The main focus of the thesis is the process of establishing an interest rate and the assessment of the credit risk in an intra-group context.  In order to expose the common problems associated with the pricing of intra-group loans the thesis has examined case law from two different jurisdictions, Canada and Sweden, which have been put in relation to the OECD guidelines and Swedish national legislation. The purpose of the master thesis has been to determine whether the establishing of an interest rate and the assessment of the credit risk of an intra-group loan should be made taking into account the parent-subsidiary affiliation or relationship and whether or not this is a deviation of the arm’s length principle. A general assumption is that, if a transaction is carried out between related parties, the price could be different from a price deriving from negotiations between two unrelated parties on the open market, due to their commercial or financial relations. A common feature in case law, regarding the establishing of an appropriate interest rate on intra-group loan, has been whether or not the parent-subsidiary should be included in the assessment of the credit risk. Much of the support available to taxpayers in resolving transfer pricing issues are relating to goods and services and not financing transactions. The main reason is the unique economic profile of financial transactions. Financial transactions are affected by different factors why it is difficult to develop usable transfer pricing policies. Establishing economically justifiable transfer pricing policies while attempting to properly reflect taxable income and prevent penalties from international tax authorities, has resulted in transfer pricing challenges that are unique to intra-group financing. According to Swedish law, interest is regarded as a deductable cost within corporate tax. However, in recent cases, the Swedish tax authorities have been questioning, the deduction right as well as the level of interest on intra-group loans. As of today, there are few national and international guidelines on this area thus it is of interest to examine and address the issues surrounding intra –group loans.

ABSTRACT This study brings into critical focus the relationship between the National Arts Council of Zimbabwe (NACZ) as an aspect of the government’s cultural policy and theatre in Harare. It demonstrates that the birth and well being of the NACZ has been shaped by global and African perspective of arts councils as well as politics in form of colonisation and decolonisation processes. It argues that the NACZ played an influential role in the development of theatre before 1995, mostly through administering legislation that facilitated, provided a framework and regulations that created the surrounding in which theatre operated as well as providing minimal funding. It has also been effective in facilitating the movement of local and international theatre artists into and out of Zimbabwe during the period under study (1985 to present date). Generally this promoted the development of community theatre. However it maintains that its role was negatively affected by the restructuring process it underwent in 1995, and worsened by the changing economic and political conditions after 2000. Due to those circumstances it has not been able to regularly disburse enough funding yet that is the biggest area of deficiency in the sector. Instead it is the donor community that has shouldered this aspect mostly, in some cases with the assistance of the NACZ, which in turn has promoted largely, the development of political and theatre for communication. Theatre artists are continuously aligning themselves to the expectations of the donor community.

Transfer pricing Abstract The thesis focuses on transfer pricing which falls within a scope of international taxation. The aim of the theses is to define transfer pricing, describe transfer pricing rules and to assess these rules. The first part of the theses focuses on international taxation, especially BEPS. Double tax treaties and ATAD directive are further described. The second part of the diploma theses focuses on transfer pricing from international perspective. Transfer prices are prices agreed between associated enterprises. The fundamental concept of transfer pricing is arm's length principle. The prices agreed between associated enterprises should equal to prices which would have been agreed between independent parties. The arm's length principle is included within the double tax treaties. The theses further focuses on OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, especially comparability analysis and transfer pricing methods, which are used for setting up of transfer prices. The third part of the theses focuses on transfer pricing rules from the Czech perspective. The respective rules are included within the Income Taxes Act and legally non-binding guidance, which follow the international rules. The Czech Tax Authorities increase their attention on...

Disertacijoje nagrinėjami sandorių kainodaros teisinio reguliavimo ypatumai Lietuvoje ypatingą dėmesį kreipiant į tarptautinių organizacijų (Ekonominio bendradarbiavimo ir plėtros organizacijos (EBPO) ir Europos Sąjungos) rekomendacijų įtaką jam. Pirmoje disertacijos dalyje pateikiama sandorių kainodaros samprata, sandorių kainodaros reguliavimo raida Lietuvoje ir EBPO bei Europos Sąjungos lygmeniu, tiriama tarptautinių organizacijų rekomendacijų reikšmė sandorių kainodaros reguliavimui, nagrinėjamas EBPO pavyzdinės mokesčių konvencijos dėl pajamų ir kapitalo 9 straipsnis ir jo pagrindu priimtos Lietuvos teisės normos. Ši dalis baigiama „ištiestosios rankos“ principu pagrįstos sandorių kainodaros kritika ir perspektyvomis. Antroje dalyje, skirtoje bendrosioms sandorių kainodaros praktinio taikymo nuostatoms Lietuvoje ir EBPO bei Europos Sąjungos rekomendacijų įtakai joms, tiriama palyginamumo analizė, sandorių kainodaros metodai ir jų parinkimas ir sandorių kainodaros dokumentavimo reikalavimai. Trečioje dalyje analizuojamos tarptautinės ginčų sandorių kainodaros srityje nagrinėjimo galimybės ir jų prevencija tiriant abipusio susitarimo procedūrą pagal minėtą pavyzdinę konvenciją ir sutartis dėl dvigubo apmokestinimo išvengimo, ginčų šioje srityje nagrinėjimą pagal 1990 m. liepos 23 d. Konvenciją 90/436/EEB dėl dvigubo apmokestinimo išvengimo koreguojant asocijuotų įmonių pelną ir šių ginčų prevenciją išankstiniais kainodaros susitarimais. / In the dissertation there are analyzed peculiarities of transfer pricing legal regulation in Lithuania paying a special attention to the influence of international organizations‘ (Organisation for Economic Co-operation and Development (OECD) and European Union) on it. In the first part there are submitted the concept of transfer pricing, the history of transfer pricing regulation in Lithuania and at the level of OECD and the European Union, there are analyzed impact of recommendations of international organizations to the transfer pricing regulation and Article 9 of OECD Model Tax Convention on Income and on Capital and Lithuanian legal provisions adopted basing on this Article. This part is ended by presenting the critics of transfer pricing, based on arm’s length principle, and the perspectives of it. In the second part, which is dedicated to the general provisions of Lithuanian transfer pricing implementation practical issues with regard to the OECD and European Union recommendations, there are examined comparability analysis, transfer pricing methods and the selection of them, as well as transfer pricing documentation requirements. In the third part there are analyzed the legal regulation of the possibilities of international disputes on transfer pricing resolution and their prevention by examining the mutual agreement procedure under the mentioned Model Convention and conventions of double taxation, resolution of disputes according to Convention 90/436/EEC on the... [to full text]

Disertacijoje nagrinėjami sandorių kainodaros teisinio reguliavimo ypatumai Lietuvoje ypatingą dėmesį kreipiant į tarptautinių organizacijų (Ekonominio bendradarbiavimo ir plėtros organizacijos (EBPO) ir Europos Sąjungos) rekomendacijų įtaką jam. Pirmoje disertacijos dalyje pateikiama sandorių kainodaros samprata, sandorių kainodaros reguliavimo raida Lietuvoje ir EBPO bei Europos Sąjungos lygmeniu, tiriama tarptautinių organizacijų rekomendacijų reikšmė sandorių kainodaros reguliavimui, nagrinėjamas EBPO pavyzdinės mokesčių konvencijos dėl pajamų ir kapitalo 9 straipsnis ir jo pagrindu priimtos Lietuvos teisės normos. Ši dalis baigiama „ištiestosios rankos“ principu pagrįstos sandorių kainodaros kritika ir perspektyvomis. Antroje dalyje, skirtoje bendrosioms sandorių kainodaros praktinio taikymo nuostatoms Lietuvoje ir EBPO bei Europos Sąjungos rekomendacijų įtakai joms, tiriama palyginamumo analizė, sandorių kainodaros metodai ir jų parinkimas ir sandorių kainodaros dokumentavimo reikalavimai. Trečioje dalyje analizuojamos tarptautinės ginčų sandorių kainodaros srityje nagrinėjimo galimybės ir jų prevencija tiriant abipusio susitarimo procedūrą pagal minėtą pavyzdinę konvenciją ir sutartis dėl dvigubo apmokestinimo išvengimo, ginčų šioje srityje nagrinėjimą pagal 1990 m. liepos 23 d. Konvenciją 90/436/EEB dėl dvigubo apmokestinimo išvengimo koreguojant asocijuotų įmonių pelną ir šių ginčų prevenciją išankstiniais kainodaros susitarimais. / In the dissertation there are analyzed peculiarities of transfer pricing legal regulation in Lithuania paying a special attention to the influence of international organizations‘ (Organisation for Economic Co-operation and Development (OECD) and European Union) on it. In the first part there are submitted the concept of transfer pricing, the history of transfer pricing regulation in Lithuania and at the level of OECD and the European Union, there are analyzed impact of recommendations of international organizations to the transfer pricing regulation and Article 9 of OECD Model Tax Convention on Income and on Capital and Lithuanian legal provisions adopted basing on this Article. This part is ended by presenting the critics of transfer pricing, based on arm’s length principle, and the perspectives of it. In the second part, which is dedicated to the general provisions of Lithuanian transfer pricing implementation practical issues with regard to the OECD and European Union recommendations, there are examined comparability analysis, transfer pricing methods and the selection of them, as well as transfer pricing documentation requirements. In the third part there are analyzed the legal regulation of the possibilities of international disputes on transfer pricing resolution and their prevention by examining the mutual agreement procedure under the mentioned Model Convention and conventions of double taxation, resolution of disputes according to Convention 90/436/EEC on the... [to full text]

This master’s thesis compares the OECD transfer pricing recommendations with the transfer pricing rules of the US. The main focus is the ethical pharmaceutical industry and intangible property, in particular marketing intangibles. The Glaxo case is used to illustrate how the US takes advantage of areas of uncertainty to increase the country’s tax revenue. The US shows little consideration for the OECD’s objectives of having a set of universally applicable transfer pricing rules. The purpose of this master’s thesis is to explain and analyze why the IRS took a new approach on marketing intangibles in the Glaxo case, evaluate the global effect of the Glaxo case, and discuss how similar situations should be dealt with in the future. The natural forum to achieve universally harmonized transfer pricing rules is the OECD. When the OECD fails to provide adequate recommendations, the US and other countries take matters into their own hands by constructing rules deviating from the recommendations of the OECD. These rules tend to put the countries’ interests first creating a competitive international transfer pricing community harmful to MNEs. The consequence is a negative effect on global trade and investment. In the Glaxo case the US took advantage of the area of uncertainty regarding intangible property and marketing intangibles to serve its own purpose and came up with a new approach on marketing intangibles. This approach has consequences for all MNEs with affiliates in the US and distributors outside the US. The new approach states that the value of a product is attributable to the marketing activities conducted by a US subsidiary rather than to R&amp;D carried out by a UK parent. The new approach may affect distributors outside the US since the value they have can be allocated to a US affiliate conducting marketing and sales activities. The ethical pharmaceutical industry depends on intangible property and R&amp;D is the most important value-driver in this industry. In addition, the characteristics of the ethical pharmaceutical industry are such that ethical pharmaceutical companies are priority targets of the IRS’s audits. If the IRS’s new approach prevails, the negative consequences for the ethical pharmaceutical industry as well as the society as a whole may be severe. There are three main conclusions and recommendations in this master’s thesis. First, the Member countries of the OECD have to respect the principle of transfer pricing as neutral concept. Second, tax authorities must take into consideration the sound business reasons of MNEs and understand their need for tax predictability. Finally, it is in the interest of all countries to cooperate and establish a uniform interpretation and application of transfer pricing thereby avoiding double taxation and creating a balance in the international transfer pricing community. / Denna magisteruppsats jämför OECD:s rekommendationer gällande internprissättning med de amerikanska internprissättningsreglerna. I uppsatsen fokuserar författarna på internprissättningsproblematiken gällande immateriella tillgångar i läkemedelbranschen, med särskilt fokus på den typ av immateriella tillgångar som uppstår genom försäljning och marknadsföring (marketing intangibles). USA använder sig av områden där rättsläget är osäkert för att öka sina skatteintäkter. För att illustrera detta beskrivs och analyseras Glaxo-fallet. USA visar på så sätt lite hänsyn till ett av OECD:s viktigaste mål; att skapa en universellt harmoniserad tolkning och tillämpning av internprissättning för att motverka dubbelbeskattning och öka möjligheten för multinationella företag att förutse och planera sin skatt. Syftet med denna magisteruppsats är att förklara och analysera varför den amerikanska skattemyndigheten (IRS) valde en ny inställning till marketing intangibles i Glaxo-fallet, utvärdera den globala effekten av Glaxo-fallet och diskutera hur liknande situationer bör hanteras i framtiden. OECD är det mest lämpliga instrumentet för att skapa en internationell konsensus på internprissättningsområdet. Eftersom internprissättning av transaktioner som involverar immateriella tillgångar och särskilt marketing intangibles utgör ett osäkert område med endast lite vägledning från OECD finns det stort utrymme för länder att skapa egna regler och rättspraxis på området. När länder som USA tar saken i egna händer och skapar sina egna regler inom internprissättning tenderar de att sätta sina egna intressen i första rummet. Konsekvensen blir en internationell internprissättningsmiljö där konkurrensen om de multinationella företagens vinster är stor, vilket skadar den internationella handeln och investeringsviljan hos företag. Det är just detta som skett i Glaxo-fallet. Resultatet av Glaxo-fallet blev en ny inställning till hanteringen av denna typ av transaktioner, något som USA länge eftersökt för att lösa problemet med en minskande skattebas. Den nya amerikanska inställningen får konsekvenser för alla multinationella företag med företag i intressegemenskap i USA och distributörer utanför USA. USA sänder nu ut en signal att värdet av en produkt inte styrs utav de år av forskning och utveckling som krävdes för att skapa ett patent av det brittiska moderbolaget i Glaxo-fallet. Istället är det de immateriella tillgångar som uppkommer av försäljnings- och marknadsföringsaktiviteter som tillför en produkt det egentliga värdet. I Glaxo-fallet innebar detta att en majoritet av vinsten av försäljningen av läkemedlet Zantac skulle hänföras till det amerikanska dotterbolaget och därmed beskattas i USA. Inställningen innebär att distributörer utanför USA kan komma att påverkas genom att värdet de tillfört genom forskning och utveckling eller andra viktiga funktioner kan bli mindre betydelsefullt än värdet som tillförs av marknadsföring. Läkemedelsbranschen är beroende av immateriella tillgångar för att kunna fungera och forskning och utveckling är den mest betydelsefulla värdeskapande funktionen inom industrin. Företag i läkemedelsbranschen är dessutom mycket benägna att hamna i blickfånget för internprissättningsrevisioner. Om den nya amerikanska inställningen vinner mark är det mycket troligt att konsekvenserna blir allvarliga både för läkemedelsindustrin och för samhället i stort. I denna magisteruppsats har författarna antagit tre huvudsakliga slutsatser med rekommendationer. Den första är att OECD:s medlemsländer måste respektera principen om en neutral inställning till internprissättning. Som en andra slutsats kan sägas att skattemyndigheter måste beakta de affärsmässiga skälen till de transaktioner som företas av multinationella företag och förstå multinationella företags behov av förutsebarhet beträffande beskattning. Slutligen ligger ett internationellt samarbete i alla länders intresse och en internationell konsensus gällande tolkning och tillämpning av internprissättning skapar balans och motverkar dubbelbeskattning.

This thesis answers the question “How does the application of the Swedish adjustment rule correspond to the OECD point of view regarding intragroup loans to thinly capitalised companies?” The question is answered by using the traditional legal method and by examining the way the adjustment rule is applied by the Supreme Administrative Court, the Swedish approach when using the arm’s length principle in Swedish law is then compared to the approach recommended by the OECD. From a tax point of view intragroup prices on commodities and services are of vital importance for multinational enterprises, since these prices in the end affects the total corporate taxation. Also the way of financing a company can have tax implications since it could be an advantage for an MNE to arrange financing of companies within the group through loans rather than contribution of equity capital. A company with a disproportionate debt to equity ratio is considered thinly capitalised and since interest payments are considered deductible expenses, which dividends are not, it provides a way to transfer untaxed profits within a group. This may be an incentive for MNEs to intentionally thinly capitalise companies by providing them with capital through loans instead of equity contributions. The Swedish provision regulating transfer pricing between associated enterprises is the adjustment rule which expresses the arm’s length principle. The purpose of the rule is to adjust erroneous pricing between associated enterprises and it has four requisites that have to be fulfilled in order to be applicable. In the thesis it is concluded that nothing in the preambles to the adjustment rule points at the provision being applicable to thin capitalisation, on the contrary they indicate that it should have a narrow application. Through case law it has been established that the adjustment rule is not applicable to thin capitalisation situations in the sense that it can not be used to reclassify a loan into equity contribution. The provision is, in such a situation, only applicable to adjust interest rates that deviate from rates on the open market. The arm’s length principle expressed in article 9.1 of the OECD Model Tax Convention however seems to have a broader application than the adjustment rule. It is stated in the commentary to the article that it may be applied to prima facie loans, i.e. it can reclassify a loan into equity contribution if the surrounding circumstances points at it being the true nature of the transaction. The conclusions drawn when comparing the reasoning of the Supreme Administrative Court with the OECD regarding the application of the arm’s length principle, is that the way the OECD reason regarding the true nature of a transaction is based on the same idea as the reasoning of the Swedish court. The Swedish Supreme Court however uses this type of reasoning when applying the substance over form principle and not when applying the adjustment rule. In other words, the difference is that the adjustment rule is not acknowledged the same scope of application as article 9.1. Regarding the need to legislate against thin capitalisation in Sweden it is the authors’ opinion that since no examination of the problem has been performed, it is necessary to examine whether thin capitalisation in reality constitutes a problem for the Swedish revenue. Not until it is established if a problem exists should there be a discussion regarding the construction of such a provision.

<p>This master’s thesis compares the OECD transfer pricing recommendations with the transfer pricing rules of the US. The main focus is the ethical pharmaceutical industry and intangible property, in particular marketing intangibles. The Glaxo case is used to illustrate how the US takes advantage of areas of uncertainty to increase the country’s tax revenue. The US shows little consideration for the OECD’s objectives of having a set of universally applicable transfer pricing rules. The purpose of this master’s thesis is to explain and analyze why the IRS took a new approach on marketing intangibles in the Glaxo case, evaluate the global effect of the Glaxo case, and discuss how similar situations should be dealt with in the future.</p><p>The natural forum to achieve universally harmonized transfer pricing rules is the OECD. When the OECD fails to provide adequate recommendations, the US and other countries take matters into their own hands by constructing rules deviating from the recommendations of the OECD. These rules tend to put the countries’ interests first creating a competitive international transfer pricing community harmful to MNEs. The consequence is a negative effect on global trade and investment.</p><p>In the Glaxo case the US took advantage of the area of uncertainty regarding intangible property and marketing intangibles to serve its own purpose and came up with a new approach on marketing intangibles. This approach has consequences for all MNEs with affiliates in the US and distributors outside the US. The new approach states that the value of a product is attributable to the marketing activities conducted by a US subsidiary rather than to R&D carried out by a UK parent. The new approach may affect distributors outside the US since the value they have can be allocated to a US affiliate conducting marketing and sales activities. The ethical pharmaceutical industry depends on intangible property and R&D is the most important value-driver in this industry. In addition, the characteristics of the ethical pharmaceutical industry are such that ethical pharmaceutical companies are priority targets of the IRS’s audits. If the IRS’s new approach prevails, the negative consequences for the ethical pharmaceutical industry as well as the society as a whole may be severe.</p><p>There are three main conclusions and recommendations in this master’s thesis. First, the Member countries of the OECD have to respect the principle of transfer pricing as neutral concept. Second, tax authorities must take into consideration the sound business reasons of MNEs and understand their need for tax predictability. Finally, it is in the interest of all countries to cooperate and establish a uniform interpretation and application of transfer pricing thereby avoiding double taxation and creating a balance in the international transfer pricing community.</p> / <p>Denna magisteruppsats jämför OECD:s rekommendationer gällande internprissättning med de amerikanska internprissättningsreglerna. I uppsatsen fokuserar författarna på internprissättningsproblematiken gällande immateriella tillgångar i läkemedelbranschen, med särskilt fokus på den typ av immateriella tillgångar som uppstår genom försäljning och marknadsföring (marketing intangibles). USA använder sig av områden där rättsläget är osäkert för att öka sina skatteintäkter. För att illustrera detta beskrivs och analyseras Glaxo-fallet. USA visar på så sätt lite hänsyn till ett av OECD:s viktigaste mål; att skapa en universellt harmoniserad tolkning och tillämpning av internprissättning för att motverka dubbelbeskattning och öka möjligheten för multinationella företag att förutse och planera sin skatt. Syftet med denna magisteruppsats är att förklara och analysera varför den amerikanska skattemyndigheten (IRS) valde en ny inställning till marketing intangibles i Glaxo-fallet, utvärdera den globala effekten av Glaxo-fallet och diskutera hur liknande situationer bör hanteras i framtiden.</p><p>OECD är det mest lämpliga instrumentet för att skapa en internationell konsensus på internprissättningsområdet. Eftersom internprissättning av transaktioner som involverar immateriella tillgångar och särskilt marketing intangibles utgör ett osäkert område med endast lite vägledning från OECD finns det stort utrymme för länder att skapa egna regler och rättspraxis på området. När länder som USA tar saken i egna händer och skapar sina egna regler inom internprissättning tenderar de att sätta sina egna intressen i första rummet. Konsekvensen blir en internationell internprissättningsmiljö där konkurrensen om de multinationella företagens vinster är stor, vilket skadar den internationella handeln och investeringsviljan hos företag. Det är just detta som skett i Glaxo-fallet.</p><p>Resultatet av Glaxo-fallet blev en ny inställning till hanteringen av denna typ av transaktioner, något som USA länge eftersökt för att lösa problemet med en minskande skattebas. Den nya amerikanska inställningen får konsekvenser för alla multinationella företag med företag i intressegemenskap i USA och distributörer utanför USA. USA sänder nu ut en signal att värdet av en produkt inte styrs utav de år av forskning och utveckling som krävdes för att skapa ett patent av det brittiska moderbolaget i Glaxo-fallet. Istället är det de immateriella tillgångar som uppkommer av försäljnings- och marknadsföringsaktiviteter som tillför en produkt det egentliga värdet. I Glaxo-fallet innebar detta att en majoritet av vinsten av försäljningen av läkemedlet Zantac skulle hänföras till det amerikanska dotterbolaget och därmed beskattas i USA. Inställningen innebär att distributörer utanför USA kan komma att påverkas genom att värdet de tillfört genom forskning och utveckling eller andra viktiga funktioner kan bli mindre betydelsefullt än värdet som tillförs av marknadsföring. Läkemedelsbranschen är beroende av immateriella tillgångar för att kunna fungera och forskning och utveckling är den mest betydelsefulla värdeskapande funktionen inom industrin. Företag i läkemedelsbranschen är dessutom mycket benägna att hamna i blickfånget för internprissättningsrevisioner. Om den nya amerikanska inställningen vinner mark är det mycket troligt att konsekvenserna blir allvarliga både för läkemedelsindustrin och för samhället i stort.</p><p>I denna magisteruppsats har författarna antagit tre huvudsakliga slutsatser med rekommendationer. Den första är att OECD:s medlemsländer måste respektera principen om en neutral inställning till internprissättning. Som en andra slutsats kan sägas att skattemyndigheter måste beakta de affärsmässiga skälen till de transaktioner som företas av multinationella företag och förstå multinationella företags behov av förutsebarhet beträffande beskattning. Slutligen ligger ett internationellt samarbete i alla länders intresse och en internationell konsensus gällande tolkning och tillämpning av internprissättning skapar balans och motverkar dubbelbeskattning.</p>

<p>This thesis answers the question “How does the application of the Swedish adjustment rule correspond to the OECD point of view regarding intragroup loans to thinly capitalised companies?” The question is answered by using the traditional legal method and by examining the way the adjustment rule is applied by the Supreme Administrative Court, the Swedish approach when using the arm’s length principle in Swedish law is then compared to the approach recommended by the OECD.</p><p>From a tax point of view intragroup prices on commodities and services are of vital importance for multinational enterprises, since these prices in the end affects the total corporate taxation. Also the way of financing a company can have tax implications since it could be an advantage for an MNE to arrange financing of companies within the group through loans rather than contribution of equity capital. A company with a disproportionate debt to equity ratio is considered thinly capitalised and since interest payments are considered deductible expenses, which dividends are not, it provides a way to transfer untaxed profits within a group. This may be an incentive for MNEs to intentionally thinly capitalise companies by providing them with capital through loans instead of equity contributions.</p><p>The Swedish provision regulating transfer pricing between associated enterprises is the adjustment rule which expresses the arm’s length principle. The purpose of the rule is to adjust erroneous pricing between associated enterprises and it has four requisites that have to be fulfilled in order to be applicable. In the thesis it is concluded that nothing in the preambles to the adjustment rule points at the provision being applicable to thin capitalisation, on the contrary they indicate that it should have a narrow application. Through case law it has been established that the adjustment rule is not applicable to thin capitalisation situations in the sense that it can not be used to reclassify a loan into equity contribution. The provision is, in such a situation, only applicable to adjust interest rates that deviate from rates on the open market. The arm’s length principle expressed in article 9.1 of the OECD Model Tax Convention however seems to have a broader application than the adjustment rule. It is stated in the commentary to the article that it may be applied to prima facie loans, i.e. it can reclassify a loan into equity contribution if the surrounding circumstances points at it being the true nature of the transaction.</p><p>The conclusions drawn when comparing the reasoning of the Supreme Administrative Court with the OECD regarding the application of the arm’s length principle, is that the way the OECD reason regarding the true nature of a transaction is based on the same idea as the reasoning of the Swedish court. The Swedish Supreme Court however uses this type of reasoning when applying the substance over form principle and not when applying the adjustment rule. In other words, the difference is that the adjustment rule is not acknowledged the same scope of application as article 9.1.</p><p>Regarding the need to legislate against thin capitalisation in Sweden it is the authors’ opinion that since no examination of the problem has been performed, it is necessary to examine whether thin capitalisation in reality constitutes a problem for the Swedish revenue. Not until it is established if a problem exists should there be a discussion regarding the construction of such a provision.</p>