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.

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On September 1, 2020, the IRS issued final regulations regarding the base erosion and anti-abuse tax (“BEAT”) codified in IRC §59A. These regulations finalize the proposed BEAT regulations published on December 6, 2019 with certain refinements. Among other guidance, the final BEAT regulations provide detailed rules that allow corporate taxpayers to waive deductions for purposes of BEAT. Although waiving deductions will likely result in additional tax costs, the waiver election may be an easier and less costly solution than the alternative of making substantive business model or supply chain changes to mitigate BEAT.

Continue Reading Waiving BEAT Deductions – The Smart Election for Multinational Taxpayers?