{"id":7138,"date":"2017-10-04T20:50:24","date_gmt":"2017-10-04T18:50:24","guid":{"rendered":"https:\/\/altax.al\/case-of-use-of-resale-price-method\/"},"modified":"2021-11-19T16:24:13","modified_gmt":"2021-11-19T15:24:13","slug":"case-of-use-of-resale-price-method","status":"publish","type":"post","link":"https:\/\/altax.al\/en\/case-of-use-of-resale-price-method\/","title":{"rendered":"Case of use of resale price method"},"content":{"rendered":"<p><em>Summary of business of corporation and foreign-related person<\/em><\/p>\n<p>German corporation S is a distributor of product A in Albania. Corporation P in Netherlands, which\u00a0is company S\u2019s parent company, manufactures and distributes product A in Netherlands.<\/p>\n<p><!--more--><\/p>\n<p><em>Summary of foreign-related transaction<\/em><\/p>\n<p>Company S imports product A as company P\u00e2\u20ac\u2122s sole import agent, and sells it to some 10\u00c2\u00a0third-party agents in Albania.<\/p>\n<p><em>Functions and activities of corporation and foreign-related person<\/em><\/p>\n<p>Company S does not engage in unique or original advertising or sales promotion activities, and\u00a0makes no use of its own trademarks or other such properties in its distribution activities.<\/p>\n<p><em>State of Albanian\u00a0market<\/em><\/p>\n<p>About a dozen foreign manufacturers making products that compete with product A have\u00a0entered the Albanian\u00a0market. Five of the sole import agents for these foreign manufacturers file\u00a0financial statements that are openly accessible, and other information is also available, including\u00a0information from the companies\u2019 websites and analyses published by market researcher companies. Following examination of these materials, it was found that company T is a reseller\u00a0of products imported from a third-party foreign manufacturer to third-party agents in Albania, and\u00a0that it does not engage in any other business.<\/p>\n<p>Product B sold by company T bears a strong\u00a0similarity to product A in terms of its properties, construction, and function, and it was also\u00a0found that company T is largely the same as company S in terms of volume of sales, market\u00a0level, and sales functions (e.g., advertising, sales promotion, after-sales service, packing, and\u00a0delivery). Company T was also found not to use its own trademarks or other such properties in\u00a0its distribution activities.<\/p>\n<p><strong>Treatment for transfer pricing taxation purposes<\/strong><\/p>\n<p><em>Consideration of applicability of traditional transaction methods\u00a0<\/em><\/p>\n<p>As precedence is given to application of the traditional transaction methods when selecting the\u00a0method of calculation of the arm\u2019s length price the provisions of Article 36\/2 of Income Tax Law in Albania (No.8438\/ 1998)\u00a0an examination of comparable transactions in accordance and other relevant provisions produced the following findings.\u00a0and other relevant provisions produced the following findings.<\/p>\n<p>-As company S resells the product A that it purchases from third parties, it was\u00a0considered that, among the traditional transaction methods, the RP method may be\u00a0applicable. It was also found that the financial data required to apply the RP method\u00a0was obtainable from publicly available information on company T.<\/p>\n<p>-Product B imported from a third party and sold to agents in Japan by company T bears\u00a0a strong similarity to product A. Company T was also found to be generally similar to\u00a0company S in terms of its function as a reseller, the scale of transactions, market\u00a0conditions, and so forth.<\/p>\n<p><em>Selection of method of calculation of arm\u2019s length price<\/em><\/p>\n<p>It was found that the import of similar product B from a foreign third-party by company T could\u00a0be used as the comparable transaction for the import of product A by company S from company\u00a0P. On the basis of this situation, it was found that among the traditional transaction methods, it\u00a0was appropriate to apply the RP method to company\u00a0S, as the buyer of the inventories involved in the foreign-related transaction, in order to calculate the arm\u2019s length price.<\/p>\n<p><strong>Explanation<\/strong><\/p>\n<p>Regarding points to note when considering the applicability of the traditional transaction\u00a0methods (including methods equivalent to the traditional transaction methods) and judging\u00a0whether transactions corresponded to comparable transactions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Summary of business of corporation and foreign-related person German corporation S is a distributor of product A in Albania. Corporation P in Netherlands, which\u00a0is company S\u2019s parent company, manufactures and [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[10281],"tags":[8392,8391],"class_list":["post-7138","post","type-post","status-publish","format-standard","hentry","category-online-education","tag-resale-price-method","tag-transactions"],"featured_image_src":{"landsacpe":false,"list":false,"medium":false,"full":false},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Case of use of resale price method - ALTAX<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/altax.al\/en\/case-of-use-of-resale-price-method\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Case of use of resale price method - ALTAX\" \/>\n<meta property=\"og:description\" content=\"Summary of business of corporation and foreign-related person German corporation S is a distributor of product A in Albania. 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