Amazon claims the IRS is using an inaccurate estimate for calculating its transfer pricing taxes.
The case involves transfer pricing and the extent to which the IRS can tax assets abroad.
And, rein in their transfer pricing abuses, with these companies hiding income in offshore tax havens?
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Transfer pricing used by multinationals to shift profits around the globe may distort trade figures.
Resolving issues like intellectual property rights or transfer pricing between the partners will add new complexity, Lutz says.
That would help prevent the worst abuses of transfer pricing scams, in which tax havens play a handy role.
Branch office taxes can lead to trouble on Section 482 transfer pricing tax issues (where the profits are booked).
Issues with transfer pricing, offshoring of intellectual property, and the like would persist.
The IRS lost the Veritas case, which emboldened companies like Amazon to be more aggressive in transfer pricing figures.
Would that be a better option than trying to enforce transfer pricing rules?
Take another example that the senators pointed to: Apple, as do many other multinational companies, uses a technique called transfer pricing.
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For many years the Swiss-based multinational fought allegations that it profiteered, and engaged in creative transfer pricing, on its patented tranquilisers, Librium and Valium.
Till now, Britain's rules on transfer pricing have cut across that principle: the Paris parent of a Kent company has had to obey them, a London parent has not.
But because the money was earned overseas (though realistically, some of it probably got there through transfer pricing), it can defer paying taxes on it until the money comes home.
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Experts say other whistleblowers are waiting for what they hope are imminent payments on large issues as varied as payroll tax withholding, tax shelters, illicit foreign accounts or arcane corporate accounting matters like transfer pricing.
"We are not getting the revenues we deserve often because of either corrupt practices, transfer pricing, tax evasion and all sorts of activities that deprive us of our due, " Mr Annan told the BBC's Newsday programme.
Another point about Section 482 transfer pricing.
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By shifting income from high-tax to low-tax countries through transfer pricing, using hybrid entities that are treated as corporations in some countries and flow-through entities in others, stripping profits from high-tax countries through intracompany financing, repatriating under favorable tax conditions, and other tax avoidance mechanisms, multinationals mitigate the impact of being headquartered in a high-tax state.
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