Arcotia Hatsidimitris - International Tax Dialogue

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54 – 6. REACHING A DECISION POINT Box 13. IRS Statement of Procedural Rules for Appeals Appeals will ordinarily give consideration to an offer to settle a tax controversy on a basis which fairly reflects the relative merits of the opposing views in the light of the hazards which would exist if the case were litigated … [a fair and impartial resolution is one that] reflects on an issue-by-issue basis the probable result in the event of litigation, or one that reflects mutual concessions for the purpose of settlement based on the relative strength of the opposing positions where there is a substantial uncertainty of the result in the event of litigation. Not every case referred to Appeals can be settled. For example, settlement is not permitted unless the taxpayer is able to demonstrate there is real uncertainty in law or fact or both as to the correct application of the relevant law to the case. Appeals focus on the evidence available in a case and have to assess the law that applies to an issue. They must consider any settlement proposal demonstrating a good faith attempt to resolve the case. Where there is a dispute between the business and the National Tax Administration (NTA) in Japan there is a clear process which allows for a review of the assessment, both at examiner level and subsequently by the National Tax Tribunal, before an appeal goes to formal litigation as explained in Box 14. Box 14. Japan – NTA: Reinvestigation and Reconsideration before Litigation When the tax authorities (i.e. District Director, Regional Commissioner of the Regional Taxation Bureau) do a disposition for taxation and taxpayers object to that disposition, taxpayers can use the following remedy during a certain period. There is no procedure in Japan such as negotiated resolution between tax authority and taxpayers. Request for reinvestigation A request for reinvestigation is the first stage in administrative appeal with regard to national taxes. In cases where tax authorities took action for a correction, determination or seizure, with which taxpayers are dissatisfied, taxpayers can request the tax authorities to revoke or change the ruling, within two months from the date when the decision by tax authorities was made. Request for reconsideration Taxpayers, who remain dissatisfied with the decision made following the request for reinvestigation above, are entitled to file a request for reconsideration to the Director-General of the National Tax Tribunal, within 1 month from the date when the decision of reinvestigation was made. Litigation Taxpayers, who remain dissatisfied with the decision by the Director-General of the National Tax Tribunal, are entitled to file litigation with the judiciary seeking a legal remedy, within six months of the date when the decision by the Director- General of the National Tax Tribunal was made. Settling disputes by litigation The costs of litigating a transfer pricing case can quickly become out of proportion to the tax in dispute and even where that is not so they can still be huge. DEALING EFFECTIVELY WITH THE CHALLENGES OF TRANSFER PRICING © OECD 2012
6. REACHING A DECISION POINT – 55 Across the world, transfer pricing disputes are said to be very difficult to litigate. As was observed in the introduction, they are fact intensive and they require expert evidence on business sectors and pricing strategies. Litigation will usually also involve specialist tax evidence and testimony from one or more economists. When in 2007 HMRC officials interviewed judges in a number of countries who regularly hear tax disputes in Court, the commonly expressed view was that transfer pricing cases should not be litigated unless one side or other had a compelling case. Without there being a compelling case, these judges said that they would generally be inclined to split cases down the middle. A tax law seminar recently organised in the UK to consider the issue of transfer pricing dispute reached a similar view – transfer pricing cases should be capable of a negotiated settlement where all relevant facts were on the table, but if litigation proved necessary the relevant tribunal or Court should take firm control of the process and where appropriate restrict the number of expert witnesses and take other steps to make the judicial process manageable. Key thoughts for the chapter The most difficult decision to be taken in many transfer pricing audits or enquiries is often when to stop fact finding and bring the case to a conclusion. Business and governments alike need to have confidence in the procedures by which that stage is reached and in how the decision of whether to negotiate a settlement or litigate is taken. Well understood and objective procedures with good governance are essential. DEALING EFFECTIVELY WITH THE CHALLENGES OF TRANSFER PRICING © OECD 2012
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ITD Transfer Pricing Conference: Tr
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5 a) Organizational set-up Challeng
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5 a) Organizational set-up Head Off
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5 a) Organizational set-up National
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5 b) Staffing, training and managin
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Transfer Pricing Learning Curve Pot
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EXAMPLE: Training of the staff - CR
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THANK YOU marica.houska@porezna-upr
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Dealing Effectively with the Challe
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Page 41 and 42: 1. INTRODUCTION - 15 Against this b
Page 43 and 44: 1. INTRODUCTION - 17 • The ease o
Page 45 and 46: 2. SELECTING THE RIGHT CASES - 19 C
Page 47 and 48: 2. SELECTING THE RIGHT CASES - 21 I
Page 49 and 50: 2. SELECTING THE RIGHT CASES - 23 I
Page 51 and 52: 2. SELECTING THE RIGHT CASES - 25 T
Page 53 and 54: 2. SELECTING THE RIGHT CASES - 27 d
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Page 68 and 69: 42 - 5. MAINTAINING PROGRESS, TACKL
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ORGANISATION FOR ECONOMIC CO-OPERAT
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Arcotia Hatsidimitris - International Tax Dialogue

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