Summer Austin, Partner in Baker McKenzie’s Tax Practice, recently sat down with Tax Notes to discuss transfer pricing and what we can expect in the coming year. She highlighted how recent court decisions, including the US Supreme Court’s Loper Bright ruling, are reshaping the interpretation of section 482 and creating tension between long-standing principles like the arm’s-length standard and the commensurate-with-income requirement.
Summer emphasized that these legal shifts coincide with operational challenges at the IRS. This environment means taxpayers’ current decisions could face scrutiny under different conditions in the future, while foreign tax authorities continue to increase their enforcement efforts.
Looking ahead, Summer noted the need for clarification, particularly from the OECD to reduce inconsistencies in applying rules to intangibles.
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