Anthony Tam, our Executive Director of Tax Advisory Services at Mazars in Hong Kong contributed an article under the topic of “Will multinational companies be able to guarantee a profit to their limited risk subsidiaries in 2020?” to Asia-Pacific Journal of Taxation Vol. 24 No.2.
Co-authored by Anthony Tam from Mazars in Hong Kong, Frédéric Barat and Frédéric Lubczinski from Mazars Societe D’Avocat, this article discussed that many multinational enterprises (“MNEs”) are structured with an entrepreneur and one or a few limited risk affiliates. In many developing countries in Asia, entities will only carry out single and limited risk functions which may not be compensated with a high profit margin, yet should maintain a reasonable profitability level. As these functions should not bear any losses, explanations of the losses incurred by these enterprises would not be accepted by the tax authority while transfer pricing adjustments could be imposed.
To read the full article, please see the PDF attached below.
Credits: Asia-Pacific Journal of Taxation Vol. 24 No.2 (2021)