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. 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. 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. 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. 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’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>

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 focus of this thesis is alternative methods used to determine transfer pricing in practice, mainly in the environment where there is a lack of available comparable information in the market. The paper is divided into four chapters. The first lists basic terminology, available relevant legislation and briefly outlines particular methods of determining a transfer pricing as recommended by OECD directives and the use of those. The second chapter focuses mostly on identifying of an interval for transfer pricing acceptable for tax authorities under a sale of an enterprise or its part. The third chapter mentions further alternative methods for which the underlying asset for determining of transfer price are financial derivatives. The last chapter discusses the results of carried out analyses and presents recommendations to using alternative methods. The thesis contents are supported by a designed computer program, which is a key element for using the alternative methods in practice.

臺灣現有移轉計價之規範未有明確的罰則(Penalty)，因而衍生許多稅負規避的問題。本文採用動態最適化(Dynamic Optimization)的模型來觀察跨國企業移轉計價的行為，在面臨懲罰與兩國稅差時企業會如何利用移轉價格及數量來進行獲利移轉以規避稅負，進而分析政府調降稅率以降低稅差並吸引獲利移轉的稅率政策對企業移轉計價的影響，最後再探討罰則在法規制定上的必要性。結果顯示，預料到的稅率政策在長期能有效減少企業從事移轉價格操弄(Transfer Price Manipulation)，但在短期﹝除了宣告那一刻之外﹞反而更助長移轉價格操弄的發生，特別是當政策宣告至執行之期間過長時更為嚴重。此外，由先前的文獻可知無罰則下的最適移轉價格為一邊界解(Boundary Solution)，本文也證明了此邊界解亦可能出現於有罰則的情況下。然而，罰則的存在創造了內部解(Interior Solution)的可能性，此內部解較邊界解更趨近於常規交易價格，因此我們仍建議政府制定罰則。 / This paper employs a dynamic optimization model to determine the equilibrium price and quantity in a multinational firm (MNF) faced with a threat of a penalty. We analyze the impact on transfer pricing that arises from the unanticipated and anticipated permanent taxation policy of home country and host country. Anticipated taxation policy for reducing tax differentials can reduce transfer price manipulation in the long term. However, except for the moment of announcement, such reduction of transfer price manipulation does not occur in the short term, especially in the case of a large time lag of policy. We also show that the boundary solution is possible even though transfer price penalty exists and suggest that governments impose penalty which creates the possibility of interior solution.

Optical frequency standards are necessary tools for accurate measurement of time and length. In practice these standards are stabilised laser systems locked to a known frequency reference. These references are typically the resonant frequencies of the atoms of an absorption medium that have been theoretically calculated to a high degree of accuracy. This thesis describes a combination of experimental and theoretical research performed on modulation transfer spectroscopy (MTS)--a technique used to frequency stabilise a laser in order to produce an accurate frequency reference--with emphasis placed on developing techniques and procedures to overcome the limitations found in existing MTS stabilised laser systems. The focus of the thesis is to generate a highly accurate frequency reference by researching the system parameters that will increase the signal to noise ratio and improve the accuracy of the reference through refinement of the signal structure. The early theoretical interpretation of MTS was effectively a low absorption approximation that occurs at low pressures. This approximation ignores the depletion of beam energy through absorption and is a distinct limitation of the theoretical model in its ability to accurately predict the influence of a range of system parameters on signal strength and structure. To overcome this limitation a 3-D (or volumetric) analysis was developed and is presented here for the first time. This volumetric model is a measure of two depleted beams interacting collinearly in an absorbing medium of iodine and is described to accurately predict the signal maximum as a function of pressure for all wavelengths. This model was found to be more accurate in predicting the influence of system parameters on the signal strength and structure, including that of pump beam intensity, pressure, saturation parameter, cell length and modulation parameters. The volumetric model is a novel approach to MTS theory but is more complex computationally than the traditional low pressure model and therefore more difficult to implement in many situations. To overcome this problem a hybrid model was developed as a combination of the low pressure and volumetric models. The comparison between the rigorous volume model and the hybrid model indicate that there is a deviation in the signal strength at high pressures. However, the agreement was very good in the pressure regimes that are commonly used to realise actual frequency references. Comparison of the hybrid model to experimental data was performed over a range of different wavelengths (532 nm, 543.5 nm, 612 nm and 633 nm) and found to be in close agreement. This gives confidence in the model to accurately predict signal strength and structure in any situation. Three mechanisms have been identified that limit the accuracy of frequency references due to the creation of residual amplitude modulation (RAM) where it shifts the frequency of the reference. The influence of RAM is included in the hybrid model as a ratio of the amplitude modulated and frequency modulated components of the saturating beam. These RAM production mechanisms result from the modulation of the saturating beam, the overlap of the beams in the medium, and the differential absorption of the sidebands in the medium. While the first mechanism has been previously reported the latter two are discussed here in detail for the first time. RAM generated by the modulators used (acousto-optic or electro-optic modulators) was typically of the order of 10% to 12%, depending on the excursion of the created sidebands. RAM generated by an asymmetric beam overlap with the modulators used was found to be as large as 30%. A combination of these two independent mechanisms can be used to provide a "RAM-free" state of the system by using one to cancel the effects of the other. The third RAM generation process--medium induced RAM--is difficult to remove but through a careful combination of absorption related parameters--namely, pump intensity, cell length, pressure and detector phase--the effects of RAM can be removed, leading to a distortion free MTS signal. Further investigation into the predictions provided by the hybrid model shows that there is a complex relationship between cell length and the optimum pressure required for maximum signal strength, such that longer cell lengths will not necessarily improve the signal strength. This is contrary to conventional thinking and is important in the MTS design process to reduce unnecessary costs and improve the signal to noise ratio and frequency accuracy. Optimisation of frequency stabilised laser systems using MTS are generally performed using trial and error. Comparison of these optimum parameter values to those predicted by the hybrid model show that for popular wavelengths such as 532 nm they are similar. In addition, the hybrid model is able to predict the frequency shifts that arise within the system parameters used and has shown that existing systems being used at 532 nm, 633 nm and 778 nm could improve their signal to noise ratio and accuracy through a variation in the parameters. A methodology based on the hybrid model is presented that can be used to calculate the optimum parameters for maximum signal strength and a "RAM-free" state for any wavelength. This systematic approach can therefore be used to guide the design of actual frequency stabilised laser systems prior to and during the design process.