The End of the Arm’s Length Principle

December 11, 2019 | (Conference)

Duff & Phelps' Transfer Pricing team invite you to join their final seminar in the Autumn Transfer Pricing Series. As more countries enact unilateral digital services taxes to address the tax challenges of the digitalizing economy, the OECD’s attempts to bring order to the chaos have shifted away from measures targeting the digital giants to a revolutionary abandonment of the arm’s length principle. This will potentially impact all “consumer-facing” businesses.

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In light of the OECD’s public consultation on November 21 - 22 , we examine how the international tax system has reached this critical moment–through unilateral digital services taxes and the U.S. response–and what impact the tabled “Unified Approach” could have on businesses in their current form.

Topics will include:

  • A fundamental change in the established order: the shift away from principled residence-based taxation to formulaic source-based taxation
  • A unified approach? How will the OECD’s three new buckets of tax interact or conflict with one another and the existing transfer pricing rules?
  • Implementing the new order: what changes will be required and how great an impact will the proposals have on businesses?
  • Industry reaction: carve-outs, costs of compliance, double taxation risks and the need for mandatory binding arbitration
  • How likely are the proposals to proceed in their present form and how quickly?

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