China

Details

  • Service: Tax, Global Transfer Pricing Services (GTPS)
  • Type: Business and industry issue, Video
  • Date: 5/1/2012
  • Length: 03:22 Minutes

 Speaker

Kari Pahlman

Kari Pahlman

Asia Pacific Leader, Global Transfer Pricing Services

+852 2143 8777

ASPAC trends in transfer pricing 

Kari Pahlman, ASPAC Leader: KPMG's Global Transfer Pricing Services::

My name is Kari Pahlman. I'm based in Hong Kong and I'm actually the Asia-Pacific leader of KPMG's transfer pricing services.

Key Trends?

The key trends we're seeing in asia-Pacific is similar to global developments, more regulation, more enforcement. Also, some quite interesting features lately, how tax authorities are responding to lost litigation cases. We've got a couple of examples from Australia and India where tax authority lost an important transfer pricing litigation and, as a result of that, they are actually looking to change the law again potentially with retractive effects.


I think a third key theme or the trend in the region is that these increasingly diverged views tax authorities are developing to marketing intangibles, location savings and market premiums.

UN Transfer pricing regulations?

This is an initiative where China and India has been particularly proactive in driving the UN transfer pricing manual project. And I think one of the underlying notions there is that these countries really feel that they are contributing, much more to these economic value chains than, perhaps, the current transfer pricing rules under the OECD regime would indicate. So they have all sorts of motives from their global positioning perspective to try to create a transfer pricing landscape for their own.

APA program?

The Hong Kong APA program is a significant development from a Hong Kong perspective. Hong Kong has lately concluded a whole number of new tax treaties. And this actually is the underlying reason for the APA program. Our interpretation why the Hong Kong government wanted to come out with APAs is really that due to these treaties they face a risk that they might be dragged into corresponding adjustment or mutual agreement procedures. Therefore, they want to actually offer taxpayers a proactive avenue to address transfer pricing issues.


There are questions around, you know, how well the Hong Kong government and the fiscal authority are actually resourced around transfer pricing at this point. But it is positive that they are making a move towards this direction.

Country programs?

Just an APA programs in Asia, referring back to the country categorization – Japan, Australia, Korea have long standing established programs, but at the moment we actually see a whole number of new countries introducing these programs or, at least, considering them. India has just put out an APA program. Hong Kong has put out an APA program. Indonesia basically is on the verge of maybe concluding first APAs. Vietnam is considering a program, as well. So, I think fairly soon we'll be in a situation that APAs – through APAs you can potentially cover the whole region.

Kari Pahlman, ASPAC Leader for KPMG's Global Transfer Pricing Services gives an update on the key trends in transfer pricing in the ASPAC region.

Related video

Update on transfer pricing in China and Hong Kong Update on transfer pricing in China and Hong Kong - Chi Cheng, Head of Transfer Pricing for KPMG in China and Hong Kong provides an in-depth look at the key trends and issues in transfer pricing in China and Hong Kong.

 

 

 

 

 

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

 
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