Photo of Jason M. Osborn

Jason M. Osborn

Subscribe to Jason M. Osborn's Posts

Jason Osborn is a Tax partner in the firm’s Washington DC office. He provides sophisticated transfer pricing and international tax advice to multinational clients in wide range of industries, including financial institutions, pharmaceuticals, chemicals, software, automotive, consumer products, energy and transportation.

Jason re-joined Mayer Brown in 2013 after holding transfer pricing-related positions with Internal Revenue Service (“IRS”) from 2008-2012, initially as a team leader in the Advance Pricing Agreement (“APA”) Program and subsequently as a manager in the transfer pricing branch of the Office of Associate Chief Counsel (International). Leveraging this IRS experience, Jason brings to the table a unique and insider’s perspective in advising clients on complex transfer pricing matters and negotiating APAs. Prior to his IRS service, Jason was a senior Tax associate at Mayer Brown focused on transfer pricing matters.

Continue Reading

Contact:Read more about Jason M. Osborn

On September 9, 2021, the Treasury Department and the Internal Revenue Service (“IRS”) issued its Priority Guidance Plan for 2021-2022. The Priority Guidance Plan gives the public a sense of what regulations and other guidance the Treasury Department and the IRS might develop over the following 12 months. Among dozens of other pending and potential guidance projects, the Priority Guidance Plan lists the following two new potential section 482 regulations projects:

  • Regulations under §482 clarifying the effects of group membership (e.g., passive association) in determining arm’s length pricing, including specifically with respect to financial transactions.
  • Regulations under §482 further clarifying certain aspects of the arm’s length standard, including (1) coordination of the best method rule with guidance on specified methods for different categories of transactions, (2) discretion to determine the allocation of risk based on the facts and circumstances of transactions and arrangements, and (3) periodic adjustments.

…
Continue Reading Priority Guidance Plan Portends New Transfer Pricing Guidance

The concept of business, technology, the Internet and the network. A young entrepreneur working on a virtual screen of the future and sees the inscription: Intellectual property

On August 5, 2021, the OECD released updated Peer Review Results for preferential tax regimes reviewed by the OECD Forum on Harmful Tax Practices (“FHTP”) in connection with BEPS Action 5. Of particular interest to Multinational Enterprises (“MNEs”), the Peer Review Results report that the Foreign-Derived Intangible Income (“FDII”) regime is already “in the process of being eliminated” and that “the United States has committed to abolish this regime.”

The possibility that FDII might be repealed should come as no surprise given the Biden Administration’s Green Book proposal to eliminate FDII. And in any event, the repeal cannot actually take effect until and unless FDII is repealed by legislation. Nevertheless, for MNEs that would be adversely affected by the possible repeal, the references in the Peer Review Results send a strong signal that FDII repeal may be a key priority in future tax reform negotiations.…

Continue Reading Whither FDII — OECD Discusses FDII in Harmful Tax Practices Update

In February 2021, the Organisation for Economic Co-operation and Development (“OECD”) issued a handbook linked with the official roll-out of its International Compliance Assurance Programme (“ICAP”). ICAP was first  introduced as a pilot in January 2018 (“ICAP 1.0”) as a voluntary program where MNE groups may receive “comfort and assurance” from multiple tax administrations as to the veracity of the MNE group’s transfer pricing allocations and numerous types of international transactions. While some notable countries did not participate in ICAP 1.0 (for example, Germany), the pilot program received positive reviews by a number of MNE groups. In March 2020, the OECD enhanced the pilot program (“ICAP 2.0”) to encourage more countries to join. On March 22, 2021, the OECD announced an initial list of twenty countries that are participating in the official program.[1]
…
Continue Reading ICAP, a New Tool in the Multiverse of Multinational Tax Dispute Management

In the U.S., transfer pricing benchmarking under the Comparable Profits Method (“CPM”) or Transactional Net Margin Method (“TNMM”) depends on the availability of public company financial data. In recent years, the decreasing number of U.S. listed and non-exchange traded companies has made this benchmarking more challenging, not only due to the smaller population from which the comparable can be selected: Many of the remaining listed and non-exchange traded companies are either large companies that own intangibles or small companies that often operate at a loss. This trend should prompt transfer pricing practitioners to consider new, creative approaches in selecting comparable companies for purposes of CPM/TNMM, and in appropriate cases, to re-consider transactional or other methods that do not rely on publicly available profitability data. Further, an APA might now be a prudent choice to obtain certainty, even if APAs had not been considered necessary or worthwhile from a cost-benefit perspective in the past to mitigate tax risk.
…
Continue Reading The Vanishing U.S. Comparable

Rockstar

On March 23, 2021, the United States’ Advance Pricing and Mutual Agreement Program (“APMA Program”) released its 2020 annual report (“2020 Annual Report”) to the public concerning advance pricing agreements (“APAs”). COVID-19 has caused unprecedented disruptions  to taxpayers and tax administrations alike, but the 2020 Annual Report shows that the APMA Program remained highly productive in 2020. Last year taxpayers filed 121 APA requests—the same amount as in 2019. And in 2020, APMA executed 127 APAs—seven more than the prior year.
…
Continue Reading APMA to COVID-19: Don’t Stop Me Now

Consider the following hypothetical: Researchers at a US-parented drug company develop an artificial intelligence (or “AI”) system that can identify new therapeutic targets with minimal human intervention. The drug company sells the system to its foreign affiliate in a lower-tax jurisdiction. What is the appropriate valuation of the system on this outbound transfer (e.g., based on the cost to create it or based on the value of the IP it is likely to generate)? And, when the AI system later successfully creates a new therapeutic, which entity will be entitled to the non-routine returns from sales of the therapeutic: the US parent that developed the system, the foreign subsidiary that owns the system that developed the therapeutic, or some combination of both?
…
Continue Reading Transfer Pricing for AI-Generated Intellectual Property

The Mutual Agreement Procedure (“MAP”) is a useful dispute resolution mechanism for multinational companies facing a transfer pricing or other assessment resulting in double tax, whether in the U.S. or abroad. In order to fully avail themselves of the advantages of the MAP process, taxpayers should pay careful attention to the applicable procedures to optimize their chances of a successful resolution.
…
Continue Reading The Mutual Agreement Procedure (“MAP”): Advantages and Potential Pitfalls for Resolution of Double Tax Issues

Coronavirus economic impact

Just in time for the holidays, the OECD has published detailed guidance about the impact of the COVID-19 pandemic on transfer pricing. The guidance has useful information for taxpayers and tax administrations alike. It contains general advice on the application of basic transfer pricing principles during the pandemic, as well as specific advice on four issues: (i) comparability analyses, (ii) allocating losses, (iii) government-assistance programs, and (iv) advance pricing arrangements (“APAs”). The OECD guidance is broadly consistent with comments we made in a prior post about the impact of the pandemic on transfer pricing.
…
Continue Reading OECD Guidance on Pandemic’s Impact on Transfer Pricing

Colliding of two Quasars galaxies with Black Hole in centrum

Last week, the IRS issued new guidance that addresses “telescoping” in mutual agreement procedure (“MAP”) and advance pricing agreement (“APA”) cases. Very generally, the guidance disallows (subject to a $10 million materiality exception) telescoping for tax years starting in 2018, when the Tax Cuts and Jobs Act (“TCJA”) came into effect, while continuing to allow telescoping for pre-2018 years in appropriate cases. According to the IRS’s Advance Pricing and Mutual Agreement (“APMA”) program, the new guidance was needed to address the impact of the TCJA “and its many interlocking provisions that require careful determination (and redetermination, as needed) of a U.S. taxpayer’s taxable income and tax attributes.” The new guidance has the potential to drive up compliance costs by increasing the number of tax returns that taxpayers must file to resolve MAP and APA resolutions for post-TCJA years (and resolutions spanning both pre- and post-TCJA years).
…
Continue Reading Telescoping into the Void

Man teleworking wearing shirt, tie and pajama pants

COVID-19 has sparked a seismic change in the workplace as many companies have found that working from home (“WFH”) has not diminished employee productivity and that employees prefer its greater flexibility. Given that—and the potential for saving on overhead costs—many companies have announced plans to adopt long-term WFH policies and close or realign office space. The OECD and several countries including the US, UK, Ireland, and Australia have issued guidance that excepts employees temporarily dislocated outside their employer’s country from creating unintended permanent establishments (“PE”)—but long-term WFH employees are not similarly excepted. The US, in particular, has thus far only officially extended PE protection for temporary dislocations of up to 60 calendar days that begin within the emergency period of February 1, 2020 through April 1, 2020.

While many employees that WFH do so from the same country as their employer, that is not always true, and so companies would be wise to perform their due diligence. To that end, this post analyzes some PE issues that a company should consider before it adopts a long-term WFH policy.…

Continue Reading Work-From-Home Policies in the Post-COVID Era