Skip to Main Content
 

Bloomberg BNA Quotes Patricia Lewis: 4 Things to Know About the IRS's Intercompany Pricing Deals

August 27, 2018, Bloomberg BNA

Coca-Cola Co., Procter & Gamble Co., and Honda Motor Co. Ltd. are a few of the multinational companies capitalizing on advance tax deals with governments, including the U.S., to shrink tax reserves and secure tax certainty in their cross-border transactions.

 . . .

“Being able to operate with certainty in your major transactions lets you focus on other things,” Patricia Lewis, a member at Caplin & Drysdale, told Bloomberg Tax. “Maybe that's another way to look at it—spend more time on your business than your taxes.”

. . .

Securing an agreement can take years.

. . .

“You have to be very patient,” Lewis said. “And if the client is not of that mindset, it can be a very uncomfortable situation.”

. . .

The entire process can get quite expensive.

. . .

Lewis agreed. If anything, $100,000 is a bare minimum for the outside sources a company may use. “It could be $1 million depending on the complexity of the case and the tenacity of the IRS,” she said.

. . .

Smaller companies will certainly be affected by the user fee increases, Melo and Lewis said, but most companies that get an APA tend to be large. For Honda, the increase is “relatively small” and won't affect its decision to pursue an APA.

. . .

Japan tends to be a popular country for bilateral agreements.

APMA has become increasingly thoughtful about the overall APA process, Lewis said, and other countries have gotten more sophisticated. “The U.S. has good relations with a lot of these countries,” she added.

 . . .

Tax reform might change the reason behind getting an APA.

. . .

Lewis agreed. Unless a company is under particular deadlines to renew an APA, most companies are spending this year trying to determine where their business and transactions stand under the new tax regime, she said.

For the full article, please visit Bloomberg BNA’s website (subscription required).

Excerpt taken from the article “4 Things to Know About the IRS's Intercompany Pricing Deals” by Sony Kassam for Bloomberg BNA.

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at www.caplindrysdale.com.
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
202.862.5000
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2018 Caplin & Drysdale, Chartered
All Rights Reserved.