Monday, December 7, 2009

Tax Authorities Increasing Collaborative Exams

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Elvin Hedgpeth, who was with the U.S. Competent Authority office for more than 28 years before joining Ernst & Young,  and Arjo van Eijsden, head of the firm's Dutch tax litigation group, describe how tax officials' recent pronouncements indicate that they likely will participate in simultaneous and joint audits to get a bird's-eye view of a multinational enterprise's global tax position.

While Australia, Canada, France, Germany, Japan, the United Kingdom, and the United States are known to have engaged in simultaneous exams in the past, they note that the volume of such examinations over recent years has shown little increase despite the rapid pace of globalization.

However, they conclude that this is about to change and that corporations should be expecting more multi-authority examinations. To read the Nov. 9 article in BNA's Daily Tax Report, visit http://www.bna.com/products/corplaw/dtr.htm

To view the European Commission's "Proposal for a Council Directive on administrative cooperation in the field of taxation" see: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0029:FIN:EN:PDF

To view the Internal Revenue Service language on simultaneous audits see Internal Revenue Manual - 4.46.3 Planning the Examination at: http://www.transferpricing.com/pdf/Internal%20Revenue%20Manual%20-%204.46.3%20Planning%20the%20Examination%20(Cont.%202).pdf

— Rita McWilliams, Managing Editor, BNA Tax Management's Transfer Pricing Report

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