Page 50 - Strategic Tax Planning for Global Commerce & Investment

Tax Benefits for U.S. Exporters

Year Event
Transfer pricing adjustments have existed in many tax systems since around
1930
this time
The United States and the OECD establish the first transfer pricing
1979
guidelines
The Internal Revenue Service, in the U.S.A., issues regulations for transfer
pricing under Internal Revenue Code Section 482 as well as issues obligatory
1994
guidelines for the application of transfer pricing rules “General Principles
and Guidelines”
The OECD issues transfer pricing guidelines for its member countries
1995 “OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax
Administrators”
2010 The OECD issues a revised version of the 1995 guidelines

The transfer pricing guidelines issued by the OECD and the
U.S.A. are similar in principle and have been adopted by many
countries OECD member and non-member. Most of the
European Union countries have adopted the OECD guidelines
without modifications.

Relationship of the Parties

The relationship between parties to a transaction affects the way
in which transfer pricing is determined. The transfer pricing
rules recognize three relationships:

 Both parties to the transaction are controlled
(i.e. sale between a U.S.A. subsidiary and a
foreign subsidiary of the parent company)
 One party to the transaction is controlled,

the other party is uncontrolled (i.e. sale be-
tween a U.S.A. subsidiary of a parent com-
pany and an unrelated company).

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