O'Reilly logo

Asia-Pacific Transfer Pricing Handbook by Margaret Kent, Robert Feinschreiber

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter Nineteen

Japanese Guidelines Address Diverse Transfer Pricing Issues

The Japanese transfer pricing regulations address a number of diverse issues as part of the case examples. These examples address:

  • Case 23: Determining whether Services Provide Commercial Value
  • Case 24: Multiple Year Considerations
  • Case 25: Establishing the Target Profit Margin
  • Case 26: Critical Assumptions

CASE 23: DETERMINING WHETHER SERVICES PROVIDE COMMERCIAL VALUE

The schematic of the business relations specifies:

  • Japanese Corporation P manufactures and sells Product A.
  • Ten years ago, Japanese Corporation P established three companies as subsidiaries to produce and to distribute Product A in their respective countries:
    • Foreign-related person SX in Country X
    • Foreign-related person SY in Country Y
    • Foreign-related person SZ in Country Z
    • Japanese Corporation P provides services to foreign-related person SX, to foreign-related person SY, and to foreign-related person SZ
  • The S companies procure all of their parts and raw materials locally to produce and sell Product A in their respective countries.
  • Japanese Corporation P has a unit that has responsibility for various operations concerning the S group.

Japanese Corporation P

Japanese Corporation P provides these services to the S group:

a. Japanese Corporation P determines the human resource policy at the S group and interviews candidate directors at the S group.
b. Japanese Corporation P manages business operations at the S group through weekly teleconferencing. ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required