📂 Samsung’s Documentation Masterclass: How Audit-Ready Beats Aggressive Benchmarks
Extended Background
The Korean electronics sector thrives on cross-border supply chains, with Samsung routinely exporting components to group affiliates. As TP audits grew more aggressive regionally, documentation quality became the decisive factor—sometimes more so than statistical benchmarks.
Detailed Arguments
Taxpayer
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Presented granular, transaction-level documentation, carefully mapping actual business activities to market data.
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Used independent benchmarks directly tied to subsidiary pricing and risk, not just broad averages.
Tax Authority
- Challenged prices as too low based on general third-party sales in the market, favoring high statistical targets.
Court Reasoning
- Gave full weight to taxpayer’s documentation and real-world comparability, overruling generalized industry averages.
Procedural Journey
- Reversal of a major audit adjustment; taxpayer completely exonerated on appeal.
Implications Beyond the Case
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Confirmed across Asia: audit survival is about “substance in the paperwork,” not just nominal compliance.
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MNEs must invest in detailed, transaction-specific transfer pricing files.
Original Case Link:
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