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Title: | Analysing the attribution of profits to permanent establishments in Malta through the experience of practitioners |
Authors: | Pace, Luca |
Keywords: | Transfer pricing Double taxation -- Treaties International business enterprises -- Taxation -- Law and legislation. |
Issue Date: | 2015 |
Abstract: | This study seeks to examine the ways with which practitioners attribute profits to permanent establishments. The OECD has published guidelines as to how profits ought to be attributed to permanent establishments, which incorporate the arm’s length principle in arriving at a price that would be earned by that permanent establishment if it were an independent entity. As a result, the report relies heavily on the transfer pricing guidelines developed by the OECD. Accordingly, the study seeks to understand the issues practitioners encounter when attributing profits according to the OECD report, given that Malta has no transfer pricing rules and is neither bound to apply the OECD method. The objectives of this study were satisfied through the examination of foreign literature, due to a lack of local literature, making this study a first. Semi-structured interviews were conducted with local tax practitioners and tax authorities, and were analysed in light of the literature surrounding the topic. The findings revealed that practitioners do not abide by the OECD method when attributing profit to permanent establishments. It emerged that the methods adopted by the OECD are not deemed to be conclusive enough for practitioners to feel comfortable advising clients, and therefore prefer to directly approach the tax authorities and come to an agreement following a period of discussion. Further issues of uncertainty are aggravated by Malta not having transfer pricing rules. The researcher concluded that not abiding by the OECD method might not result in arm’s length prices, although it is the approach which gives the least uncertainty for tax practitioners. That said, having an approachable regulator was deemed to be a crucial element in such complex taxation issues, however due caution needs to be taken during such turbulent times. Finally, the value of this study lies within the need that existed to better understand the issues practitioners face whilst operating in such a complex area of taxation, especially since no literature regarding the local situation is currently available. |
Description: | M.ACCTY. |
URI: | https://www.um.edu.mt/library/oar//handle/123456789/8258 |
Appears in Collections: | Dissertations - FacEma - 2015 Dissertations - FacEMAAcc - 2015 |
Files in This Item:
File | Description | Size | Format | |
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15MACC074.pdf Restricted Access | 1.26 MB | Adobe PDF | View/Open Request a copy |
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