Transfer Pricing and Withholding Tax Across Entities: Where Commissions, Service Fees and Royalties Divide
The same payment from a foreign entity to a domestic one is taxed completely differently depending on whether it is characterised as a platform commission, a technical service fee or a royalty. This is not a matter of wording - it is a matter of whether the fund flow and the contract flow can explain each other. This article covers the characterisation boundaries, the five transfer pricing methods, treaty relief conditions and three permanent establishment triggers.