Administrative pricing rules

Administrative pricing rules

IRS rules used to allocate income on export sales to a foreign sales corporation.

Administrative Pricing Rules

Rules the IRS formerly used to determine the income and therefore the taxation of foreign sales corporations. Administrative pricing rules were in Section 925 of the Internal Revenue Code and have since been repealed.
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During its audit, the IRS determined that the transfer price was based on a CTI calculation that did not include total costs, thereby violating the FSC administrative pricing rules and resulting in an understatement of P&G income of $86,201,700.
The court ruled that the taxpayers' calculation of CTI violated the FSC administrative pricing rules.
the DISC commission), certain administrative pricing rules have to be followed.
543 illustrate how, for both a closely held C corporation and an LLC, the administrative pricing rules applicable to the IC-DISC clearly result in a much larger deduction to the exporter than the ETI exclusion.
The European Union also alleged that the administrative pricing rules of the FSC provisions constituted a separate violation of the SCM Agreement.
One of the most important but difficult aspects of using a FSC comes with attempting to qualify for the administrative pricing rules of Section 925(a).
These new rules retain many of the familiar attributes of the FSC, such as determination of profits on a transactional basis, marginal costing principles, foreign economic process requirements (FEP) and safe-haven administrative pricing rules.
The transfer prices are based on either of two optional administrative pricing rules or the arm's-length pricing rules of section 482 of the Code.
The reduction is based on a stated percentage (15/23 for corporate-owned FSCs, 16/23 for all others) of the FSC's earnings, computed using allowable administrative pricing rules.
Under the administrative pricing rules, transfer prices must be set so that the FSC's taxable income will not exceed the greater of (i) 23 percent of the combined taxable income (CTI) of the FSC and its related supplier (generally its U.
In most cases, it would be more beneficial to apply the administrative pricing rules to each foreign transaction.
Under the administrative pricing rules, transfer prices shall be such that the FSC's taxable income will not exceed the greater of (i) 23 percent of the combined taxable income (CTI) of the FSC and its related supplier (generally, its U.
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