United StatesUnited States

Legal ReferenceTreas. Reg. §§1.482-1 through 1.482-9

Legal ReferenceNotice 2025-4, I.R.B. 2025-3, page 419; Treas. Reg. §§1.482-1 through 1.482-9

Other than the current cross-reference to the Amount B Report in Notice 2025-4, our domestic transfer pricing framework does not explicitly reference the TPG. However, all US transfer pricing regulations are consistent with the TPG.

Legal ReferenceTreas. Reg. §§1.482-1(i)(4) and (5)

“Controlled taxpayer means any one of two or more taxpayers owned or controlled directly or indirectly by the same interests, and includes the taxpayer that owns or controls the other taxpayers.” Treas. Reg. §1.482-1(i)(5). This is a facts and circumstances analysis without pre-determined thresholds. Control includes “any kind of control, direct or indirect, whether legally enforceable or not, and however exercisable or exercised, including control resulting from the actions of two or more taxpayers acting in concert or with a common goal or purpose.” Treas. Reg. §1.482-1(i)(4).

Legal ReferenceTreas. Reg. §§1.482-3(b)(5)

The US does not have specific guidance on commodity transactions, but the guidance in Treas. Reg. 1.482-3(b)(5) is consistent with the guidance in the TPG paragraphs 2.18-2.22.

Legal ReferenceTreas. Reg. §§1.482-3(a), -4(a), -7(g)(1), and -9(a)

Others include variations of the methods listed above as well as income, market cap, and acquisition price methods.

• CUP (provided)
• Resale Price (provided)
• Cost Plus (provided)
• TNMM (provided)
• Profit Split (provided)
• Other (provided)

Legal ReferenceTreas. Reg. §1.482-1(c)

The best method rule applies.

• Hierarchy of methods (not selected)
• Most appropriate method (selected)
• Other (not selected)

Legal ReferenceTreas. Reg. §§1.482-1(c)(2) and (d); -3(b)(2), (c)(3), and (d)(3); -4(c)(2); -5(c); -6(c)(2)(ii) and (3)(ii); and 1.482-9(c)(2), (d)(3), (e)(3), and (f)(2)(iii)

US transfer pricing regulations emphasize performing a comparability analysis consistent with the TPG.

Legal ReferenceTreas. Reg. §§1.482-1(c) and (d)

Legal ReferenceTreas. Reg. §§1.482-1(e) and 1.482-7(g)(2)(ix)

Ranges or other statistical methods (including interquartile ranges) may be used to improve the reliability of the results.

Legal ReferenceTreas. Reg. §1.482-1(d)(2)

Comparability adjustments must be made if they improve the reliability of the results with respect to material differences in the comparables.

Legal ReferenceTreas. Reg. §§1.482-4, -3(f), -7(g) and -9(m)(2)

Treas. Reg. §1.482-4 provides general guidance for controlled transactions involving intangibles and is consistent with Chapter VI of the TPG. Treas. Reg. §1.482-7(g) specifically addresses transfers of existing intangibles in connection with cost contribution arrangements and is consistent with Chapters VI and VIII of the TPG. Treas. Reg. §1.482-3(f) is a coordination rule for tangible property transactions with an embedded intangible and is consistent with Chapter VI of the TPG. Treas. Reg. §1.482-9(m)(2) addresses services transactions and coordination of rules for such transactions that effect a transfer of intangible property and is consistent with Chapters VI and VIII of the TPG.

Legal ReferenceIRC §367(d) and Treas. Reg. §1.367(d)-1T

Domestic rules relating to the tax treatment of intangibles are too numerous to attempt to list here but one such rule of particular relevance is section 367(d), which requires income inclusions with respect to certain outbound transfers of intangible property in transactions that would otherwise qualify as tax-free reorganizations (in whole or in part). The regulations thereunder apply the arm’s length principle for purposes of determining the amount of such inclusions.

Legal ReferenceIRC §482 (second sentence); Treas. Reg. §§1.482-4(f)(2) and (6) and 1.482-7(i)(6)

The HTVI concept corresponds to the U.S. “commensurate with income” or “CWI” principle and “periodic adjustment” concept in our domestic transfer pricing framework.

Legal ReferenceTreas. Reg. §§ 1.482-4(f)(2)(ii) and 1.482-7(i)(6)(vi)

The CWI principle generally applies to any intercompany transfer of intangible property. Periodic adjustments under the CWI principle must be consistent with the arm’s length principle. Separate periodic adjustment rules are provided for IP transfers in §1.482-4(f)(2) and (6) and for cost contribution agreements in §1.482-7(i)(6). For purposes of those regulations, periodic adjustments cannot be made if one of the exceptions in §1.482-4(f)(2)(ii) or 1.482-7(i)(6)(vi), respectively, applies.

No.

The periodic adjustment rules are premised on comparing the price that is paid for IP to the income that is eventually attributable to that IP in the future. And for that purpose, certain exceptions apply that require waiting at least 5 (see, e.g., 1.482-4(f)(2)(ii)(E)) or even 10 years (see, e.g., 1.482-7(i)(6)(vi)(B)(2)), indicating adjustments can otherwise be made even after that period of time. In other words, by its design, the CWI principle requires comparisons over periods of time that exceed the generally applicable statute of limitation under US law, which is 3 years. Thus, the second sentence of section 482 effectively overrides the statute of limitations for purposes of applying the periodic adjustment rules.

Treas. Reg. section 1.482-4(f)(2)(i) provides that periodic adjustments “shall be consistent with” the arm’s length principle; section 1.482-7(i)(6)(i) provides that, in determining whether to make a periodic adjustment, the IRS “may consider whether the outcome as adjusted more reliably reflects an arm’s length result under all the relevant facts and circumstances. . . .”; and both sections -4(f) and -7(i) contain exceptions, including for when ex ante pricing is arm’s length by reference to a highly comparable uncontrolled transaction or when a periodic adjustment otherwise would be based on results not reasonably anticipated. These provisions ensure that a periodic adjustment will not be made if it would be an inappropriate use of hindsight.

Domestic legislation and regulations do not limit corresponding adjustments with respect to periodic adjustments, just as they do not limit such adjustments for any other transfer pricing adjustment. However, the IRS generally would not make such adjustments in the absence of a MAP request. If the IRS is presented with a MAP request, depending on the facts the IRS might make a corresponding adjustment as part of its initial, unilateral consideration of the case (see 2017 Model Tax Convention Article 25 Commentary, paragraph 32), or alternatively after bilateral consideration of the case.

Legal ReferenceTreas. Reg. §1.482-9

The guidance in Treas. Reg. § 1.482-9 regarding pricing services is consistent with the guidance in Chapter VII.

Legal ReferenceTreas. Reg. §1.482-9(b)

The services cost method in Treas. Reg. § 1.482-9(b) is consistent with the specific guidance relating to low value-adding intra-group services in Chapter VII.

Rules relating to the tax treatment of services are too numerous to attempt to list here.

Legal ReferenceTreas. Reg. §1.482-2

Treas. Reg. §1.482-2 provides rules regarding pricing intercompany loans that are consistent with the guidance in Chapter X, but our domestic transfer pricing framework does not provide guidance specific to other types of financial transactions for which guidance is provided in Chapter X.

Legal ReferenceIRC §§163(j) and 267A, among others

IRC Section 163(j) limits interest deductions as described in Action 4. IRC Section 267A limits deductions for interest and certain other payments in hybrid situations as described in Action 2. Additional rules relating to the tax treatment of financial transactions are too numerous to attempt to list here.

Legal ReferenceTreas. Reg. §1.482-7

Treas. Reg. §1.482-7 provides rules for cost sharing arrangements (“CSAs”). The CSA regulations are consistent with the guidance on cost contribution arrangements in Chapter VIII of the OECD TPG.

Certain documentation requirements are voluntary (but necessary to ensure penalty protection); while in certain cases particular documentation is required in order to take advantage of certain statutory or regulatory protections. In addition, certain information relevant to controlled transactions must be reported on Form 5472 information returns and certain information must be provided upon request.

• Master file consistent with Annex I to Chapter V of the TPG (not selected)
• Local file consistent with Annex II to Chapter V of the TPG (not selected)
• Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
• Specific transfer pricing returns (separate or annexed to the tax return) (not selected)
• Other (specify) (selected)

Legal ReferenceTreas. Reg. §1.6662-6(d)

The relevant requirements are set forth in Treas. Reg. §1.6662-6(d).

Legal ReferenceIRC §6662(e) and (h); Treas. Reg. §1.6662-6(d)

Taxpayers are generally not required to create or file transfer pricing documentation. However, there are penalties for inaccurate transfer pricing as specified in IRC §6662 for substantial valuation misstatements and gross valuation misstatements. Transfer pricing documentation that meets certain requirements may reduce or eliminate those penalties.

Legal ReferenceTreas. Reg. §1.6038-4(h)

An ultimate parent entity of a US MNE group is not required to file a Country-by-Country Report if its annual revenue for the immediately preceding reporting period was less than $850 million.

Legal ReferenceRev. Procs. 2015-40 and 2015-41; United States OECD MAP Profile

For further information on MAP and APAs, please refer to the US’s OECD MAP Profile.

• Rulings (not selected)
• Enhanced engagement or cooperative compliance programmes (selected)
• Advance Pricing Agreements (APA) (selected)
• International Compliance Assurance Programme (ICAP) (selected)
• Mutual Agreement Procedures (selected)

Legal ReferenceNotice 2025-4

A notice was released 18 December 2024 announcing that the US Treasury and the IRS intend to issue proposed regulations that, for purposes of applying section 482, implement the substance of the simplified and streamlined approach (“SSA”) as published in the TPG. This notice also provides guidance concerning application of the SSA to in-scope transactions undertaken by parties subject to U.S. tax with respect to those transactions before issuance of those proposed regulations. U.S. taxpayers may rely on the SSA, under the rules set forth in the notice, for their U.S. tax reporting for taxable years beginning on or after January 1, 2025, and before proposed regulations are published in the Federal Register.

Legal ReferenceNotice 2025-4

In-scope tested parties resident within the jurisdiction can elect to apply the simplified and streamlined approach (i.e., safe harbour)

• In-scope tested parties resident within the jurisdiction can elect to apply the simplified and streamlined approach (i.e., safe harbour) (selected)
• In-scope tested parties resident within the jurisdiction are required to follow the simplified and streamlined approach for in-scope qualified transactions and tax administrations are allowed to impose the application of the simplified and streamlined approach to in-scope qualified transactions of tested parties resident within their jurisdiction (i.e. rule) (not selected)
• N/A (not selected)

Legal ReferenceNotice 2025-4

The upper bound generally is 30%, but in some cases it can be lower than 30% but no less than 20%. See Notice 2025-4, §3.02(2).

• 20% (not selected)
• 30% (not selected)
• Other (please specify) (selected)
• N/A (not selected)

Legal ReferenceNotice 2025-4

Legal ReferenceNotice 2025-4

Legal ReferenceTreas. Reg. §§1.482-2(a)(2)(iii)

For certain loans there is a “safe haven interest rate” of 100% to 130% of the Applicable Federal Rate under the conditions specified in Treas. Reg. §1.482-2(a)(iii).

Under Treas. Reg. § 1.482-1(a)(3), a controlled taxpayer is not permitted to file an amended return to decrease taxable income.

Such adjustments are permitted subject to the limitation in Treas. Reg. § 1.482-1(a)(3).

Legal ReferenceTreas. Reg. §1.482-1(g)(3) and Rev. Proc. 99-32

Treas. Reg. §1.482-1(g)(3) provides that conforming adjustments may include treatment as a dividend or capital contribution (as appropriate). In addition, Rev. Proc. 99-32 provides an elective method to treat a conforming adjustment as a loan.

Legal ReferenceUS Tax Treaties

The US Model tax treaty follows the AOA, which is the US preferred position when establishing new tax treaties.

• Article 7 as it read before 2010. (selected)
• Article 7 as it reads after 2010. (selected)

The United States does not view the AOA as applicable to treaties with the old version of Article 7.