4 ms·
It all depends on the amounts being moved. Transfer pricing is complex because what is market rate in situation A is not market rate in situation B. $345 millio
by charlesdm 7y ago
It all depends on the amounts being moved. Transfer pricing is complex because what is market rate in situation A is not market rate in situation B. $345 million could be a minor difference of a few percentage points on tens of billions in revenue.
Just like FDSGSG wrote above, I went through a sizeable tax dispute (for an individual, outside of the US) and won. I have a good understanding of tax law yet it was nothing more than a bullshit money grab. No merit, nothing. More along the line; that's a very nice outcome for you but we don't really like it -- so pay up regardless. Like trying to shake a tree.
In this case, I can imagine for Activision (as a publicly traded company) it is better to settle a case for an OK amount than take it to court and run through the process. You have to make a risk reward analysis of whether it's worth spending time and resources on.
- ravitation 7y agoYes, obviously the settlement reflects analysis by Activision Blizzard, which is exactly the point. The expected outcome of challenging an assessed tax deficit is part of that analysis, so the choice to settle must be viewed with that in mind. I wish both you and the thread OP would stop comparing this to A) personal (or small business) tax disputes and B) tax disputes that resulted in no additional tax liability. This dispute did result in additional tax liability.