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Transfer Pricing: Intangibles and Intra-Group Finance
IBFD International Tax AcademyCourse
August 2 2010 2 - 4 August 2010
IBFD Head Office
Amsterdam
Netherlands
1760.00 EUR ( price per delegate )
This course provides participants with an in-depth coverage of two of the critical areas of transfer pricing currently under discussion at the OECD, amongst tax scholars and practitioners, and between tax administrations.
Description - Agenda (course of event)
The course is suitable for transfer pricing advisers, lawyers, accountants, tax inspectors, and in-house transfer pricing managers. The course will enable participants with a good understanding of basic transfer pricing principles to gain an in-depth und
Monika Erasmus-Koen, Ernst & Young, the Netherlands; Deloris Wright, Wright Economics Inc, United States; Michel van der Breggen, PriceWaterhouseCoopers, the Netherlands; Aamer Rafiq, PricewaterhouseCoopers, the Netherlands;
Both intra-group finance and intangibles raise a range of complex transfer pricing considerations, and if not adequately addressed may expose a multinational to significant transfer pricing risk. The course incorporates practical examples and case studies, aimed at consolidating the participant’s learnings from the formal lectures.
Day 1
08.30 - 09.00 Registration
09.00 - 09.20 Welcome and IBFD Overview
09.20 - 10.20 The significance of intangibles in transfer pricing
10.20 - 10.40 Break
10.40 - 12.45 Identification and classification of intangibles
• Intangibles definitions (legal, accounting and tax)
• Categories of intangibles
• Manufacturing and marketing intangibles
• Identifying the existence of intangibles
• Selected case law examples
• Other issues
12.45 - 14.00 Lunch
14.00 - 15.20 Pricing intangibles in use
• Transfer vs. use
• Royalty rate determination
• Pricing Methods
- Comparable Uncontrolled Transaction Method (CUT)
- Comparable Profit Method (CPM) and TNMM
- Residual Profit Split Method (RPSM)
- Other Methods
• Other considerations
• Practical examples
15.20 - 15.40 Break
15.40 - 17.00 Pricing transfers of intangibles
• Valuation approaches
• Practical examples
Day 2
09.00 - 10.30 Cost contribution agreements
• Key features
• Business models
• Reasons for using cost sharing/cost contribution agreements
• Relationship with intra-group services
• CCA vs. CSA
• OECD approach
• Participants, determination of contributions and ownership of
intangibles
• Buy-in and buy-out payments
• Treatment of stock options
10.30 - 10.50 Break
10.50 - 12.00 Cost contribution agreements (continued)
12.00 - 12.45 Cost sharing agreements: overview of the US regulations
• Qualifying cost sharing agreements in the US
12.45 - 14.00 Lunch
14.00 - 14.45 Transfer pricing and Intra-Group finance: a growing area of controversy
• Importance of Intra-Group finance transactions: developments around the world
• Types of Financial Transactions seen within Multinationals
• The importance of operational and economic substance
• Opportunities and risks
14.45 - 15.40 Inter-company loans
• Arm’s length nature of loans
• Determining arm’s length terms and conditions
• Comparability factors to consider
• Credit ratings
- Importance of a stand alone credit rating
• Establishing an arm’s length interest rate
• Common pitfalls in practice
• Importance of robust documentation
- Developing a loan pricing policy
- Having robust loan agreements in place
15.40 - 16.00 Break
16.00 - 17.00 Inter-company loans (continued)
• Case Study
Day 3
09.00 - 10.30 Guarantee fees
• Overview of types of guarantees provided
• Guarantee: service provided vs. shareholder activity
• When to charge a guarantee fee
• How to establish a guarantee fee
• Country specific approaches
• Implicit parent guarantee
- Discussion of the GE Capital case in Canada
• Practical examples/case study
10.30 - 10.50 Break
10.50 - 12.45 Cash pooling
• Why do Multinationals pool their cash?
• Fundamentals of cash pooling
Notional pooling vs. target balancing (zero balancing)
• Transfer pricing aspects of cash pooling
How to establish the credit and debit interest rates applied within the pool
How to remunerate the activities (and risk incurred) of the cash pool leader
The impact of (cross) guarantees
The relevance of substance (solvency/location of the decision makers)
• Practical examples/case study
12:45 - 14:00 Lunch
14.00 - 15.30 The interaction of transfer pricing and thin-cap
• Characteristics of thin-cap regimes
• Interaction with transfer pricing principles
• Interaction with the application of tax treaties
• Examples of country specific approaches
• Practical examples/case study
15.30 - 15.50 Break
15.50 - 17.00 Foreign exchange and derivatives
• Types of foreign exchange transactions
• Currency Swaps
• Interest rate Swaps
• Marco hedging
• Internal netting
• Payment factory
Monika Erasmus-Koen, Ernst & Young, the Netherlands; Deloris Wright, Wright Economics Inc, United States; Michel van der Breggen, PriceWaterhouseCoopers, the Netherlands; Aamer Rafiq, PricewaterhouseCoopers, the Netherlands;