The purpose of IRS Section 482 is to place a controlled taxpayer on a tax parity with an uncontrolled taxpayer, by determining, according to the standards of an uncontrolled taxpayer, the true taxable income from the property and business of a controlled taxpayer. The standard to be applied in every case is that of an uncontrolled taxpayer dealing at arm's length with another uncontrolled taxpayer. In principle, the most destabilizing aspect of the Canada-US intercompany transfer pricing comparative is the disparate approaches to pricing services, which pits the 1968 US "cost" approach against the orthodox Canadian ALP approach. The IRS's Jul 31, 2006, temporary Services regulations and now the final regulations serves to partially dissolve the conceptual mismatch in this area between the two countries because the US has moved to an ALP approach. At what point do these two different initiatives intersect and arrive at a consensus will be but one of the interesting points to focus on as Canada-US matters under the final regulations proceed.
The Implications in and for Canada of the IRS's Final Section 482 Services Re... Nathan Boidman Tax Executive; Nov
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