International Tax and Assurance Services
Mendonca & Partners CPA’s have the experience, expertise and knowledge to help your business every step of the way. Our CPAs have decades of experience dealing with international issues and will help you navigate through the labyrinth of laws, regulations and conflict of interest for all types of inbound and outbound business enterprises. We believe in providing value-added services and guidance to better shape your finances while enhancing your financial performance. Let us show you how! With proper planning, we can help you minimize your taxes and audit exposure. The greatest risk of foreign companies doing business in the USA and domestic companies doing business abroad is the lack of the proper documentation as it relates to transfer price among related companies.
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Paragraph 3 of the Commentary on Article 9 of the United Nations Model Convention states that:
“With regard to transfer pricing of goods, technology, trademarks and services between associated enterprises and the methodologies which may be applied for determining correct prices where transfers have been on other than arm’s length terms, the Contracting States will follow the OECD [The Organisation for Economic Co-operation and Development] principles which are set out in the OECD Transfer Pricing Guidelines. These conclusions represent internationally agreed principles and the Group of Experts recommends that the Guidelines should be followed for the application of the arm’s length principle.”
In the USA, documentation required under the Internal Revenue Code (IRC) § 482, including any written agreements, contracts, or documents related to the intercompany transactions. Treas. Reg. 1.6662 outlines specific materials that must be included in order to represent contemporaneous documentation for penalty protection purposes.