Dokumentationskrav vid internprissättning : En analys av lagförslagen till svenska dokumentationsregler i propositionen 2005/06:169

According to the arm’s length principle, transactions between associated multinational en-terprises (MNE) shall be based on the same conditions as transactions between unrelated parties. This means that intra-group prices on cross-boarding transactions must be at arm’s length range and consistent with conditions in the open market. The arm’s length principle is expressed in article 9.1 of the OECD Model Tax Convention and Chapter 14 section 19 of the Swedish Income Tax Act. When transfer pricing between associated MNEs is not reflecting the arm’s length princi-ple, states face the possibility of losing tax revenue. The majority of OECD member coun-tries have implemented national documentation requirements and involve enterprises to present documentation on their transfer pricing. This obligation increases the possibilities for Tax Authorities to control whether or not a company follows the arm’s length princi-ple. Chapter V of the OECD Guidelines provides general guidance in this matter. Within the EU the transfer pricing forum JTPF, has developed a standardized model for docu-mentation known as the EUTPD. Application of the EUTPD depends on the MNEs themselves but also on national requests. The Swedish legislator intends to implement national documentation requirements through the Government Bill 2005/06:169 “Effektivare Skattekontroll”. The regulation is likely to become effective 1 January 2007. Regardless that the burden of proof still lies on the Tax Authorities, MNEs are obligated to produce documentation that will be used as evidence of their transactions. The bill is drafted as a legislative framework and the implication will be developed through further directions from the Tax Authorities. Court Law will also be significant in how the legislation is applied. This thesis concludes that the proposed regulation is unclear and therefore stands to coun-teracts or undermines the purposes behind the legislation. Since transfer pricing is not an exact science it is logical that the regulation be proposed as a framework, which would ren-der the possibilities for extensive interpretations. However, indistinctive rules would not increase neither the awareness nor the predictability concerning transfer pricing and docu-mentation requirements. Considering that the majority of MNEs in Sweden are small and medium sized companies and not always familiar with the arm’s length principle, the legis-lator should have expressed the documentation requirements more precisely. Nonetheless, since the enquiries will most likely increase, enterprises will be forced to allocate resources on their transfer pricing and documentation. This legislation will in turn increase the aware-ness and predictability in the long-term