Although valuation is fundamental to both tax and customs liability in international transactions, values calculated by the two regimes can differ, often markedly, in situations where no clear rules of transfer pricing apply.
Through detailed examination of relevant guidelines, transfer pricing methodologies, and business realities prevailing among multinational enterprises, Customs Valuation and Transfer Pricing offers a cogent and convincing account of how tax and customs transfer pricing regimes may be harmonized.
Among the essential elements of this important thesis, the author discusses the following in depth:
the OECD Transfer Pricing Guidelines;
the GATT/WTO Valuation Code (GVC);
the arm's length principle;
methods, both traditional and new, of determining whether the parties' relationship influenced the price; and
additions to and deductions from the customs value.
The study concludes with an analysis of the circumstances and conditions under which the introduction of transfer pricing compensatory adjustments to transaction value would be consistent with Article 1 of the GVC.
- Rules to be harmonized
- Is it necessary or at least advisable to harmonize both tax and customs transfer pricing regimes?
- Is harmonization feasible?
- Definition – OECD Guidelines
- Recognition of the arm's length principle in the GVC
- The OECD Guidelines can be used to determine whether transaction price is arm's length under GVC Article 1.2
- Guidance for applying the arm's length principle. Use of such guidance under GVC Article 1.2
- The OECD arm's length methods and the methods laid down in GVC Articles 2, 3, 5 and 6
- Test values
- Considerations regarding the OECD arm's length methods
- Traditional methods
- Other methods
- Customs Value and Tax Value of Imported Goods. Adjustments
- IRC Section 1059A
- Definition of the term "related parties"
- Tax base of customs duties
- Price review clauses; formula pricing