For your convenience, we have included a bibliography of recommended readings and a list of court cases.

Transcription

1 Georgetown University Law Center Transfer Pricing: Selected Topics LAWG (CRN #: 10898) Professors David Ernick Joe Tobin, and David Fischer Spring 2015 The course is designed to provide a practical, historical, and theoretical understanding of international transfer pricing as it is practiced today, along with exposure to important related areas of taxation. Reading assignments will be taken from: (i) duplicated materials to be handed out in class; and (ii) the Code and Regulations (which students will be expected to own). Because new developments related to transfer pricing arise frequently, it is likely that the reading list will be augmented or otherwise revised during the term. For your convenience, we have included a bibliography of recommended readings and a list of court cases. Grading will be based on the following factors: 1) 10% on class participation; 2) 10% on in-class paper presentation (approximately minutes); and 3) 80% on final written paper (at least 25 pages). Class participation is essential to make this a good class; consequently, regular and punctual attendance is required, in accordance with the policy published in the Student Handbook. Papers are expected to reflect original writing and the guidance in the Student Handbook on citing and referencing another s work must be followed. All three professors are available to you at any time throughout the semester; please feel free to contact us via with any questions. The current class schedule is as follows: Class 1: Introduction; Common Control; Transfer Pricing Regulations - Fundamental Concepts (Monday, January 12, 2015) Class logistics Background of Section 482 Common Control The Arm s Length Standard Formulary Apportionment Code 482

2 Treas. Reg (a), (b) and (i) B. Forman Co., Inc. v. Commissioner, 453 F.2d 1144 (2 nd Cir. 1972), rev g in part 54 T.C. 912, cert. denied, 407 U.S. 934 (1972) Andrus, Bennett, and Silberztein, "The Arm s-length Principle and Developing Economies," Tax Management Transfer Pricing Report, 20 TM TPR 495 (October 20, 2011). Optional: Chapter 1, and Chapter through 260, of Transfer Pricing: Rules, Compliance and Controversy, Marc Levey and Steven Wrappe (3 rd edition) ( Levey and Wrappe ) No Class: MLK Birthday (Monday, January 19, 2015) Class 2: Transfer Pricing Regulations - Fundamental Concepts (Cont'd); Intangibles and Commensurate-with-Income (Monday, January 26, 2015) The Best Method Rule Comparability (Functions, Risks, Contractual Terms) Arm's Length Range Methods for Intangible Property Transactions Commensurate-with-Income Cost-Sharing of Intangibles Treas. Reg (c), (d), (e), and (f); Treas. Reg (skim); Treas. Reg (a) through (f); Treas. Reg ; Treas. Reg ; Treas. Reg (skim); IRS Generic Legal Advice Memorandum (IRS AM ) (March 15, 2007) on Taxpayer Use of Section 482 and the Commensurate With Income Standard Veritas v. Commissioner, 133 T.C. No. 14 (2009), A.O.D Optional: Chapters 3 and 4, Levey and Wrappe Class 3: Transfer Pricing Regulations - Intangibles (Cont'd) and Services; Dispute Resolution; Other Topics (Monday, February 2, 2015) Intangibles-continued (Cost-sharing, Ownership, Business restructuring) Methods for Services Transactions Dispute Resolution (APA Program, Treaties and Competent Authority) 2

3 Documentation and Penalties Other topics (Attribution of Profits to Permanent Establishments, OECD Transfer Pricing Guidelines, Application of section 482 to non-recognition transactions, etc.) Treas. Reg (skim) Optional: Notice , C.B. 458, 1988 Whitepaper, A Study of Intercompany Pricing under Section 482 of the Code. (Read all of Chapter 1; For Chapters 2 through 13, read only the introduction (entitled either section A or introduction) and the conclusion (entitled section E)). Optional: Chapter 5, Levey and Wrappe. Writing Assignment: Preliminary Topic Choice Submit written statement of topic Class 4: Transfers of Intangibles under Section 367(d); Reform Proposals (Alternatives to the Arm s Length Standard) (Monday, February 9, 2015) Transfers of Intangibles under Section 367(d) Patent box Formulary apportionment Excess returns Reading assignment Code 936(h)(3)(B); Treas. Reg (b) and (f) Code 367(a), (d); Temp. Treas. Reg (a)-1T(c)(5)(i), (iii); Temp. Treas. Reg (d)-1T(a) through (c); Temp. Treas. Reg (d)-1T(g)(4) Merrill, Is It Time for the United States to Consider the Patent Box?, Tax Notes, March 26, 2012, available at: US/us/washington-nationaltax/assets/Merrill0326.pdf No Class: President s Day Break (Monday, February 16, 2015) Class 5: Cost Sharing Regulations (Thursday, February 19, 2015) Monday classes meet instead of Thursday classes 3

4 Treas. Reg (Dec. 27, 2011) (Read the preamble; skim the regulations.) Veritas v. Commissioner, 133 T.C. No. 14 (2009) (review from class 2) Xilinx v. Commissioner, 598 F.3d 1191 (9th Cir. 2010) Dolores Gregory, IRS in Altera Repeats Arguments Used in Xilinx But Also Asserts Arm's-Length Standard Created by Treasury, 22 Transfer Pricing Report 847 (Nov. 14, 2013) Class 6: Authorized OECD Approach for Attributing Profits to Permanent Establishments and Business Restructurings (Monday, February 23, 2015) Organisation for Economic Co-Cooperation and Development, "2010 Report on the Attribution of Profits to Permanent Establishments" (July 22, 2010), available at: Read: Part I, sections A and B; Skim rest of Part I. Skim: Organisation for Economic Co-Operation and Development, Report on the Transfer Pricing Aspects of Business Restructurings, Chapter IX of the Transfer Pricing Guidelines (July ), available at: Writing Assignment: Final Topic Choice: Submit one to two page outline of issues to be addressed in your paper & bibliography (minimum of 10 sources) by 5:00 pm Feb. 24; Discuss with Professor by end of class on 3/2 Class 7: Role of Economic Analysis in Transfer Pricing (Monday, March 2, 2015) Lecturer: R. William Morgan, Senior Advisor to the Director of Transfer Pricing, IRS Read Compaq v. Commissioner, T.C. Memo ; Mr. Morgan will discuss in class Joint Committee on Taxation, Report on Transfer Pricing, July 20, 2010, JCX-37-10, available at: (skim) Read Testimony of R. William Morgan, Managing Director, Horst Frisch Incorporated, Ways and Means Committee Hearing on Transfer Pricing, July 22, 2010, available at: morgan testimony.pdf 4

5 No Class: Spring Break (Monday, March 9, 2015) Class 8: Recent Developments at the OECD and the UN (Monday, March 16, 2015) OECD Project on Base Erosion and Profit Shifting Revised Definition of Intangibles Safe Harbors Documentation/Country by Country Reporting Allocation of Head Office Expense Taxpayer Risk Assessment Location Savings/Market Premium Cross Border Financial Dealings (Arm s Length Interest Rates and Debt Levels) OECD Action Plan on Base Erosion and Profit Shifting (skim): OECD Guidance on Transfer Pricing Aspects of Intangibles (skim): uest&checksum=ce3edb4db4a09c2a8c8a220bd95520b6 OECD Guidance on transfer pricing documentation and country-by-country reporting (skim): uest&checksum=4fe7abc8bc4dc7f427327fad95acc723 UN Practical Transfer Pricing Manual for Developing Countries (read the Foreword): Manual TransferPricing.pdf Writing Assignment: 1 st drafts due by 5:00 pm March 17. (Professor has discretion to lower student s final grade by one grade for each day that 1 st draft is late.) Class 9: Transfer Pricing Planning and Business Restructurings (Monday, March 23, 2015) Lecturer: David Canale, Partner, Ernst & Young General Commissionaire Contract Manufacturer Intangibles/Cost Sharing 5

6 Materials To Be Provided Class 10: Paper Presentations (approximately 20 minutes each) (Monday, March 31, 2015) Class 11: Paper Presentations (Continued) (Monday, April 6, 2015) Writing Assignment: Comments from Professors on 1 st drafts Class 12: Paper Presentations (Continued) (Monday, April 13, 2015) Class 13: Paper Presentations (Monday, April 20, 2015) Class 14: Paper Presentations (Last Class) (Monday, April 27, 2015) April 27, 2015: ALL PAPERS DUE BY 5:00 PM FOR MAY GRADUATES May 10, 2015: ALL OTHER PAPERS DUE BY 5:00 PM 6

7 Georgetown University Law Center Transfer Pricing: Selected Topics LAWG , (CRN #: 10898) Professors David Ernick, Joe Tobin, and David Fischer Spring 2015 Journals: Transfer Pricing Bibliography Tax Management Transfer Pricing Report (Available online at Bloomberg BNA Tax and Accounting Center) Transfer Pricing International Journal (Available online at Bloomberg BNA Tax and Accounting Center) Refernce Books: David B. Blair, Transfer Pricing Answer Book 2013 (Practising Law Institute, 2013) Robert T. Cole, Practical Guide to U.S. Transfer Pricing (LexisNexis 3 rd Ed., 2011). Mark Levey and Steven Wrappe, Transfer Pricing: Rules, Compliance, and Controversy (CCH 3rd ed. 2010). Cym Lowell and Mark Martin, Transfer Pricing Strategies (Thomson Reuters 2013) PwC International Transfer Pricing 2013/14, available online at: BNA Portfolios (current) Transfer Pricing: Alternative Practical Strategies (890) Transfer Pricing: Economic, Managerial, and Accounting Principles (889) Transfer Pricing: European Rules and Practice (895 and 896) Transfer Pricing: Foreign Rules and Practice Outside of Europe (897 and 898) Transfer Pricing: Introductory Materials (886) Transfer Pricing: Judicial Strategy and Outcomes (888) Transfer Pricing: Records and Information (891) Transfer Pricing: The Code and the Regulations (887)