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Why is transfer pricing & double taxation a potential concern for CbC reporting?

Two expected results of the CbC reporting template are increased transfer pricing-related disputes with taxing authorities and the incidence of double taxation especially if the OECD's other transfer pricing BEPs action plan changes are adopted in final form. Many believe these changes will cause an erosion of the longstanding arm's-length transfer pricing principles by some of the more aggressive tax authorities. The focus of transfer pricing audits would therefore shift to an MNE providing information on its global value chain and its allocation of income, economic activity, and taxes paid among countries that may be unrelated to the specific transfer pricing arrangement. Ultimately, this could lead to more cross-border disputes and without adequate dispute resolution competent authority rules, increased double taxation could be a very costly result.

Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.


About this Contributor

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Bernadette Pinamont
Chief Tax Officer

Bernadette Pinamont is the Chief Tax Officer – Income Tax in the Chief Tax Office at Vertex providing insight regarding in-house corporate tax department operations and working on the development of the company's income tax solutions under Vertex Enterprise. Prior to joining Vertex, Bernadette was Vice President Tax for Endo Pharmaceuticals Inc. and Head of U.S. Tax for AstraZeneca Pharmaceuticals. Bernadette's 30 year tax career also includes the corporate tax departments of DuPont, Syngenta, and Tyco Toys and, initially, EY. Bernadette is a graduate of Seton Hall University, from which she earned both a B.S in Accounting and Juris Doctor. She is a licensed attorney and CPA.

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