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Some Advance Payments Not OK Under Transfer Pricing Rules: IRS

Sept. 22, 2022, 8:59 PM

Companies generally can’t choose to make advance payments of annual inclusions under a section of the US transfer pricing rules, according to an IRS memo released Thursday.

The memo from the Office of the Chief Counsel addresses a question about “payments claimed to be made in respect and in advance of annual inclusions under Section 367(d)(2)(A)(ii)(I).”

  • The rules don’t permit taxpayers to choose to make the advance payments, “except in limited circumstances involving ‘other property or money’ transferred by a transferee foreign corporation to a U.S. transferor in connection with an initial exchange of intangible property subject to section ...