Abstract

The article aims at presenting the most frequent examples of an overlap between CFC rules and transfer pricing rules. It depicts the key differences between these two regimes stemming mainly from their different structural objectives. Additionally, the experience of two countries having mature CFC and transfer pricing regimes is presented, namely of the United States and the United Kingdom. The choice of such benchmark group is dictated by the fact that the United States was the first country to introduce these regimes, while the United Kingdom was the last to perform a complete overhaul of CFC rules in 2013. Finally, the OECD position expressed in the Base Erosion and Profit Shifting (BEPS) Report no 3 is presented. The author concludes however that the latter report does not show full interaction of CFC rules and transfer pricing rules directing the reader to the other piece of the OECD BEPS project, i.e. the BEPS Report no 8-10, dealing with the arm’s length principle.