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The Big Tax Shakeup Decoding TCJA & OBBB with Anju Singh
Transfer pricing — the rules and methods for pricing transactions between related companies — has always been a complex challenge for multinational businesses. But now, artificial intelligence (AI) is stepping in, shaking up the world of international tax and compliance. Let’s explore how AI is changing transfer pricing, what opportunities it brings, and what hurdles remain.
AI Meets Transfer Pricing: How Smart Tech Is Revolutionizing Global Tax Compliance
If your company operates in more than one country, it probably buys, sells, or licenses goods and services between related parties. Setting the right prices for these internal transactions is crucial—not just for business reasons, but because tax authorities around the world want to make sure
The Big Tax Shakeup Decoding TCJA & OBBB with Anju Singh
If you’ve been following global tax news, you’ve probably heard about the OECD’s Pillar 1. In simple terms, it’s an international effort to update tax rules for our digital age. The idea? Make sure that the world’s biggest companies —especially tech giants—pay taxes not just where they’re headquartered, but also where their customers are.
Billion-Dollar Battles: 7 High-Profile Transfer Pricing Cases Every Business Should Know
Transfer pricing may not be breaking news on Wall Street, but in tax departments across the globe, it’s drawing headlines—and billion-dollar bills. As global tax authorities ramp up audits and crack down on profit shifting, several major multinationals
💥 When Marketing Drives Billions: GSK’s $3.4B US vs. UK Settlement
GSK, a leader in the pharmaceutical sector, developed breakthrough drugs through UK-based research and intellectual property. However, major value was also created through its intensive US marketing and distribution network. This difference in business functions sparked a fundamental question: Should profits be split based on where drugs are invented, or where they are branded and sold? GSK adopted a traditional TP structure: UK R&D entities owned patents and supplied the US affiliate, which handled all local marketing. This split mimicked industry norms before BEPS and the OECD overhaul on intangibles, with MNEs emphasizing legal ownership as the basis for profit allocation.
🛒 Amazon’s Big Intangible Win: “No Place for Imaginary Value”
Amazon’s digital business relies on massive, globally shared technology platforms. To align costs and profits cross-border, Amazon’s EU subsidiary participated in a cost-sharing arrangement for platform development. At the time, international practice around the scope of IP valuation was still evolving, and regulatory definitions of “intangibles” were narrower than today.
🥤 No More Sacred Cows: Coca-Cola’s $3.3B Formula Fizzles
Coca-Cola’s core profit engine has always relied on both secret formulas and global brand marketing—split across US and foreign affiliates. For decades, the IRS accepted a safe-harbor profit split that assigned a steady share to the US parent and bottling affiliates, based on legacy practices, not current benchmarks. Before the BEPS push, longtime agreements and APAs (Advance Pricing Agreements) were typically respected if adhered to. But shifting business models and new benchmarking raised questions about whether such formulas still reflected economic reality.
🍏 The €13B Headache: “Stateless” Apple Profits Smashed by EU Law
The tech industry’s rapid globalization spotlighted the use of low-tax jurisdictions within the EU—none more famous than Apple’s “stateless” Irish structures. By routing European profits to Irish holding companies without substantial local operations, Apple minimized its overall tax bill. This was standard practice before aggressive state aid enforcement and OECD intangibles guidance became mainstream.
🚗 Selectivity Scrutiny: Fiat’s Luxembourg Finance Structure Stands
Automotive groups frequently tap favorable financial regimes within Europe, using group financing structures to optimize global funding costs. Fiat established a treasury center in Luxembourg, applying local TP rules to set intra-group lending rates—common practice before the EU’s broad state aid enforcement push.
🍔 Big Mac Royale: A €1.25B Lesson in Royalty Substance
Global retail and franchising models like McDonald’s hinge on the payment of royalties for brand, know-how, and business support. France, a key market, became ground zero for challenges to the cross-border payment of royalties to group entities in favored tax jurisdictions—in this case, Luxembourg.
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