Bush tax cuts
The TAG prefers the comparable uncontrolled price (CUP) method, and recommends a comparison of transactions between the PE and the enterprise of which it is a part, with transactions between unrelated parties. bush tax cuts New-york-state-taxes. Such an analysis is done, however, only when identifiable transactions take place. The ExamplesThe TAG analyzes four examples to illustrate the application of its proposed methodology. These include:Example 1: Stand-alone Web server, where no operating personnel are present. bush tax cuts Irs form 8880. Example 2: Same as Example 1, except there are four servers, each located in a different country. Example 3: Same as Example 1, except that administrative personnel are present at the server location. Example 4: Same as Example 1, except that the website, the Web server, and the associated software are fully developed by personnel in the country in which the server is located. bush tax cuts Tax advice. EXAMPLE 1: Stand-alone Web server, where no operating personnel are present. The example uses a company called STARCO. This company operates a single Web server in Country B, where customers can order various music and video products that are delivered either by mail or electronically. No personnel are present in Country B. The Web server and associated website are fully automated, and able to process orders without human assistance. The Web server is also able to deliver digitized content immediately. The Web server, in this example, constitutes a PE in Country B, and STARCO is subject to tax in Country B on profits attributable to the activities taking place on the server. In determining the profit allocated to this PE, the TAG first goes through a functional analysis of the activities taking place on the Web server, and the assets used in these activities. Based on this analysis, transactions are identified that might require an allocation of profit to the PE. Next, the TAG examines ways of valuing these transactions in order to determine the amount of income earned as a result of the server's activities. Ex. 1 - Functional and factual analysisThe TAG starts with a comparison of the functions carried on through the Web server with the functions of a traditional retail establishment. The paper says "[t]he functions ordinarily associated with a retail outlet include: decision making regarding the ordering of inventory and the level of inventory to be held; negotiations regarding terms with suppliers; decisions on product pricing, marketing and promotion; establishing contacts with customers; concluding contracts with customers; the physical distribution of goods; credit control, including decisions on credit arrangements for customers; the management of incoming funds; accounting functions such as cash flow control. "The TAG concludes in this example that most of these functions do not take place at the location of the Web server. Instead, STARCO's "Head Office" performs many of these functions exclusively. The Web server and its associated software lack the ability to engage in the type of decision-making activities normally associated with retailing activity. Therefore, the STARCO Web server is not the equivalent of a full- function retail outlet, and should not be allocated profits commensurate with that type of operation. The TAG also analyzes the risk associated with the activities taking place on the Web server. Generally, the assumption of risk is an indication of a profit-oriented activity.
Bush tax cuts
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