Скачать или смотреть Benefit of Arm's Length Principle

In this video, you'll learn the steps on How To Apply Arm's Length Principle in Transfer Pricing

We explore the critical role of Arm's Length Principle (ALP) in transfer pricing and international taxation.

The ALP ensures that transactions between related parties are conducted as if they were between independent entities, reflecting open market conditions.

This principle is essential for preventing tax avoidance and ensuring multinational enterprises (MNEs) pay the appropriate amount of tax in each jurisdiction.
Key Topics Covered:
Introduction to the Arm's Length Principle and its importance in international taxation.

Tax Compliance: How the ALP helps MNEs allocate income and expenses correctly, avoiding profit shifting.
Fair Competition: The role of ALP in maintaining a level playing field between related and unrelated entities.
Revenue Protection: Safeguarding tax revenues by ensuring transactions reflect economic realities.

Steps in Applying the ALP:
1.Identification of Related Parties: Recognizing intra-group transactions involving goods, services, financing, and intellectual property.
2.Comparability Analysis:
oFunctional Analysis
oEconomic Analysis
oContractual Terms
3.Selection of Transfer Pricing Method: Including CUP Method, Resale Price Method, Cost Plus Method, TNMM, and Profit Split Method.
4.Documentation and Compliance: Maintaining detailed documentation to justify the transfer pricing method used.
Case Studies:
Intercompany Sale of Goods: Using the CUP method to adjust prices.
Provision of Services: Applying the Cost Plus Method for management services.
Challenges and Best Practices:
Challenges: Data availability, market differences, and managing complex intercompany transactions.
Best Practices: Consistent documentation, regular reviews, and engaging transfer pricing experts.

Conclusion: The Arm's Length Principle is vital in transfer pricing to ensure fair taxation and prevent profit shifting. By following a systematic approach to comparability analysis, method selection, and documentation, companies can achieve compliance and mitigate transfer pricing risks.

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Speaker:
Olatunji is the founder Taxmobile.Online and Managing Partner/CEO of AOA Professional Services.

Before this, Olatunji worked as Director- Tax and regulatory Services at Nolands Nigeria Professional Services, Senior Manager – Tax, Regulatory and advisory Services at Saffron Professional Services, Tax and Fiscal Reporting Accountant of Schlumberger Nigeria Limited, and as an Audit Trainee in Ernst & Young.

His experience covers the full range of services in internal audit and control, transfer pricing, arbitration, tax advisory and regulatory services, audit support, forensics investigation, and due diligence.

Disclaimer:
The information contained herein is general and is not intended, and should not be taken, as a legal, accounting or tax advice provided. This information remains strictly the opinion of Olatunji Abdulrazaq.

Links
LinkedIn
linkedin.com/in/abdulateef-olatunji-abdulrazaq-01a60849

Africa Tax Review
africataxreview.com

Credit:
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