2020 Year-End Tax Guide

81

www.marcumllp.com

For BEAT

For COVID-19 and CARES ACT

X

X

X Review mark-ups on payments to foreign related parties.

X Review current supply chains and utilize transfer pricing planning in conjunction with commercial considerations to establish new structures. Review current transfer pricing position with respect to generated losses and support the loss position through transfer pricing documentation. Review the possibility of providing holidays on charging interest rates on inter-company financing and on charging for inter-company services and royalties. X Review and update inter-company agreements for any legal clauses and align with third party agreements to support the transfer pricing position taken. X Review transfer pricing in line with the CARES Act stimulus and determine if transfer pricing can be used to maximize deductions and minimize global effective tax rates. While recent changes in the tax environment introduce new complexity to transfer pricing, they also create international tax and transfer pricing planning opportunities. Now is the time for MNEs to take a fresh look at their transfer pricing policies, not only to defend their current transfer pricing positions in response to the global pandemic, but also to identify new opportunities to further maximize deductibility and reduce global effective tax rates. X

Review licensing arrangements related to foreign related party IP. BEAT related party payments do not include cost of goods sold or services eligible for the Service Cost Method; explore planning ideas related to these exceptions. CbC reporting should continue to be a focus for MNE taxpayers. MNE taxpayers should continue to be diligent in preparing accurate CbC information and/or contemporaneous documentation, to provide penalty protection in the event of a transfer pricing adjustment upon examination.

X

X

Country-by-Country Reporting

X

X