US Transfer Pricing Laws & Regulations
Major Sections of the Internal Revenue Code Pertaining to Transfer PricingThe legal framework for transfer pricing in the U.S. is contained in a number of sections of the internal revenue code, as well as in IRS regulations, mostly under Section 482.
Here are some of the major sections of U.S. law relating to transfer pricing of related-party transactions:
|Complete liquidations of subsidiaries||IRC §332|
|Exchanges of stock and securities in certain reorganizations||IRC §354|
|Nonrecognition of gain or loss to corporations; treatment of distributions||IRC §361|
|Allocation of income and deductions among taxpayers||IRC §482|
|Admissibility of documentation maintained in foreign countries||IRC §982|
|Limitation on taxpayer's basis or inventory cost in property imported from related persons||IRC §1059A|
|Notice or regulations requiring records, statements, and special returns||IRC §6001|
|Information reporting with respect to certain foreign corporations and partnerships||IRC §6038|
|Limitations on assessment and collection||IRC §6501|
|Suspension of running of period of limitation||IRC §6503|
|Periods of limitation on criminal prosecutions||IRC §6531|
|Imposition of accuracy-related penalty on underpayments||IRC §6662|
|Administration of oaths and procurement of testimony||IRC §7456|
You may also use the drop-down menu at the top of this page to navigate the relevant sections of the Internal Revenue Code.
The IRS has also issued a number of regulations based on these statutes. The most important of these regulations for transfer pricing are the regulations authorized by IRC Section 482. These regulations are located at 26 CFR 1.482. On August 1, 2006, the IRS issued final and proposed regulations amending this section with respect to "Allocation of Income and Deductions from Intangibles".
Transfer Pricing Laws from Other Countries
You can find information on transfer pricing laws from many countries around the world in the Tax Director's Guide to International Transfer Pricing: 2010 Edition, which offers a country-by-country review of transfer pricing laws in a dozen major economies, addressing questions such as:
• What transfer pricing methods are accepted?
• Do the local tax authorities favor a given method?
• What dispute resolution mechanisms are available?
• Are APAs allowed and, if so, what are the rules?
• To what extent are international guidelines followed?
• How is the acceptability of comparables determined?
• What are the documentation requirements?
• How are non-compliance penalties calculated?