Abstract
This thesis describes the current Transfer Pricing rules of intangibles and considers the impact of OECD’s Pillar One on a danish based multinational enterprise. Work is undergoing to solve the issues that emerged in the BEPS project, and as a proposal to the problem issued under Action 1 regarding the taxation of digital businesses OECD has made Pillar One and Pillar Two. This paper examines how an MNE can comply with the arms-length principle when preparing the transfer prices on controlled transactions in the organization. Using both economical and legal methods, this thesis analyses the proposals in Pillar One and provides guidance to MNE’s on how to manage the implementation of Pillar One. A theoretical approach is essential for the making of this thesis. The project is based on the practical problem of taxation of multinational enterprises in this increasingly digitalized world. Theories of models to solve taxation problems are considered and applied on a fictional case with a degree of reality regarding Carlsberg. Through the understanding of Pillar One, this thesis develops a guide to determine which danish MNE’s that are included in the scope of Amount A. Furthermore, the guide will be applied on a chosen and relevant danish MNE. The top management will be able to use this guide to determine whether or not they should allocate an amount to Amount A. Pillar One consists of two “Amount’s” namely Amount A and Amount B. The scope of Amount A is to create a tax on residual profit in MNE’s. The scope of Amount B is to allocate a fixed amount on routine activities regarding marketing and distribution and to simplify the administrative burden on complying with the arms-length principle on routine activities within scope. The thesis discusses whether or not the proposals in Pillar One are in compliance with the arms-length principle, which is the basis of transfer pricing laws.
Educations | Graduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis |
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Language | Danish |
Publication date | 2021 |
Number of pages | 125 |