Is Digitization making Transfer Pricing Invisible?

Base Erosion and Profit Shifting (BEPS)

OECD noticed that national tax laws did not keep pace with globalisation of corporations and the digital economy. This left room for multinational corporations to exploit gaps that exist in domestic systems to artificially reduce their taxes. The final report by OECD “Action 1 - Addressing The Tax Challenges of The Digital Economy” was released in October 2015. In the report OECD identifies certain challenges of the digital economy direct and indirect taxes and proposes possible methods for tackling these.

The reality is such that e-commerce business models have significantly evolved since their inception. It is now widely recognized that the increasing importance of intangibles, the use of data and the spread of global value chains result in a significant effect on transfer pricing outcomes and challenge the application of traditional transfer pricing principles. The aim of this webinar is to present you with the latest trends in relation to digital business model configurations, address major concerns these digital business models rise to the transfer pricing community and how to effectively address them.

This recorded webinar will:

  • Discuss the latest trends in relation to digital economy and new business model configurations
  • Take a glance at traditional industries which now have joined the digital tide
  • Walk you through the key tax and transfer pricing issues related to the newly emerged business models:
  • Difficulties in identifying intra-group transactions of one entity/ international transactions involving intangibles
  • Effects on the performance of functional analysis
  • Challenges in applying traditional transfer pricing methods to determine the arm’s length price
  • Extra efforts required to find third party transactions which meet sufficient comparability criteria
  • Present alternative approaches for ensuring fair and timely taxation of the digital sector

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