|dc.identifier.citation||Clayson, M. 2016.THE RECOGNITION OF THE EFFECT OF PASSIVE ASSOCIATION ON CONTROLLED TRANSACTIONS FOR TRANSFER PRICING PURPOSES. Queen Mary University of London||en_US
|dc.description.abstract||This thesis examines a controversial and unsettled aspect of international tax law
in the transfer pricing field: should the effect of “passive association” within a
multinational group of companies be taken into account in pricing transactions
between group members? The marketplace may assume, typically in a financing
context, that (aside from any “explicit” support – the paradigm being a parent
company guarantee) a group member experiencing financial distress will be
supported by one or more affiliates.
The paradox to investigate is the apparent contradiction between (i) the need, in
arriving at an arm’s length price, to postulate a transaction between independent
parties, and (ii) the possible recognition, in the pricing analysis, of effects deriving
from corporate association. How far does the independence hypothesis extend?
What features of affiliation must be disregarded in constructing that hypothesis?
An absence of clarity and consistency between national tax systems in this respect
presents multinational enterprise groups with legal uncertainty and the threat of
international double taxation – a recognised obstacle to cross-border commerce.
This study presents an analysis of supranational guidance; a comparative
investigation of national tax laws in selected countries with sophisticated transfer
pricing codes; and a critical review of relevant practitioners’ and academic
literature. The arguments for and against the recognition of passive association
are distilled and evaluated from a legal perspective. The quest is for the most
rational, “black-letter” interpretation of existing laws. Alternative solutions based
on policy judgments or economic theories are not pursued.
Although the case for disregarding passive association cannot be dismissed
casually, the contrary argument – for its recognition, as part of the relevant factual
matrix, in pricing controlled transactions – appears convincing.||
|dc.publisher||Queen Mary University of London||en_US
|dc.subject||International tax law||en_US
|dc.title||THE RECOGNITION OF THE EFFECT OF PASSIVE ASSOCIATION ON CONTROLLED TRANSACTIONS FOR TRANSFER PRICING PURPOSES||en_US
|dc.rights.holder||The copyright of this thesis rests with the author and no quotation from it or information derived from it may be published without the prior written consent of the author||