Blog

The EdgarStat Blog explores issues in transfer pricing and application of the transactional net margin method (TNMM or CPM in the US) and other enterprise profit-based methods.

Medtronic Litigation: Unspecified Methods vs. Traditional Methods
September 02, 2022 by Harold McClure

This discussion presents a simplified illustration of the issues with respect to the unspecified method applied in Medtronic III in contrast to the IRS' extreme CPM approach and a traditional RPSM approach based on sound financial economics.

Topics: Residual Profit Split Method Medtronic Unspecified Method US Internal Revenue Service Section 482 Tax Policy tax controversy Intangibles TNMM/CPM US Transfer Pricing

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Speculation as to the Transfer Pricing Battle Between Western Digital and the IRS
July 11, 2022 by Harold McClure

A discussion of the possible issues in the recently settled transfer pricing dispute between Western Digital Corp. and the United States IRS.

Topics: United States Transfer Pricing Asia-Pacific Intangibles

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Super Royalties in Transfer Pricing: Going Beyond "Economics 101"
May 24, 2022 by Harold McClure

Use of the CPM/TNMM to determine royalty rates for valuable intangibles in transfer pricing is incompatible with basic financial economics.

Topics: DEMPE Royalty Rates OECD Guidelines US Internal Revenue Service Tax Policy Intangibles TNMM/CPM

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Transfer Pricing Issues for Israeli R&D Centers
March 24, 2021 by Harold McClure

The Israel Tax Authority is questioning whether costs plus markup models Israeli R&D affiliates are at arm's length. This could present issues for multinationals that have not been giving proper consideration to cost base, asset intensity and ownership of valuable intangibles in their benchmarking.

Topics: DEMPE Base Erosion and Profit Shifting (BEPS) Benchmarking Tax Policy Intangibles

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