We provide here a written summary of answers provided by the Department of Revenue to the committee at periodic question and answer sessions. These documents are classified as Revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on a specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.
Q&A with the Pennsylvania Department of Revenue
What factors are considered when auditing and assessing tax on intercompany transactions with holding companies?
The Department reviews the facts and documentation for each case to determine if there is economic substance to the transactions and whether the transactions are conducted with arm’s length rates and terms.