Global

Details

  • Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 3/16/2013

United States - IRS considers safe harbors for routine-distribution functions 

March 15:   The IRS today announced a request for comments regarding the development of a model memorandum of understanding between Competent Authorities on certain transfer pricing issues.

According to today’s release—IR-2013-30 [PDF 29 KB]—the IRS specifically is seeking comments on bilateral safe harbors with regard to arm’s length compensation for routine-distribution functions (frequently an issue in transfer pricing cases).


The IRS explained that in June 2012, the Organisation for Economic Co-operation and Development (OECD) issued a discussion draft on safe harbors, and included draft sample memoranda of understanding on certain “low risk” functions.


Recognizing that such safe harbors could support sound tax administration, the IRS is requesting comments that are “highly specific” to these issues and proposed text for draft model agreements involving routine distribution functions.


Comments are due 1 May 2013.



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