Having spent almost fifty years of my life defending the separate
accou- ing, arm's length pricing method, I have to admit that I was
somewhat surprised to be asked to contribute to a book suggesting
that the European Union might do well to consider adopting a
formulary approach to deal with the taxation of inter and intra
company transactions. I was even more surprised to see the
invitation coming from Ms. Joann Weiner an ardent co-defender of
arm's length pricing and my strong right arm in that regard while
we both served in the U.S. Treasury Department in the mid '90s. The
book gives Ms Weiner the opportunity to comment frankly from an
insider's perspective of the many admitted problems of the arm's
length system which could be avoided by a formulary approach. Ms.
Weiner brings to this project a thorough expert knowledge of the b-
efits and shortfalls of each of the systems she discusses -
separate accounting v. formulary apportionment. Who better to
decide to give qualified support to formulary than someone who
organized a U.S. Treasury conference to defend arm's length pricing
against a Congressional challenge in favor of formulary
apportionment.
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