Josh Finfrock, Director in the Memphis Office, recently contributed to an article covering updates on 2016 Second Quarter Transfer Pricing Developments.
The article discusses the recently released guidance from the Australian Tax Office (ATO), the recent court ruling in favor of Medtronic, and new guidance from the OECD on the implementation of Country-by-Country reporting.
The Medtronic case is worth noting due to the tax the company would have paid had there been an alternate conclusion. Medtronic recently received a favorable ruling from the U.S. Tax Court in its transfer pricing dispute with the IRS. Had they received an unfavorable ruling, Medtronic would have owed nearly $1.4 billion. The issue arose because the IRS argued that Medtronic U.S. should have received higher royalty rates from its Puerto Rico based subsidiary, MPROC. Medtronic argued that the IRS did not adequately consider the importance of product quality in the medical device industry, and that MPROC provided more than just product assembly.
For questions on how these transfer pricing updates may have an impact on your company, please contact Josh Finfrock at firstname.lastname@example.org or 901.685.5575. To view the full article on CBIZ's Insights & Resources page, click here.