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. 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 knowledge obtained from the formal lectures.
This is an interactive course with a maximum of 30 participants. Prior to the course, participants will be given access to an online platform which provides them with additional pre-reading material and supplementary material (e.g. legal documentation, case law and related articles/literature). During the course, participants will be provided with a course binder containing documents relevant to the course.

ay 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 - Refreshments

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 Transfer Pricing of Intangibles


• Transfer v 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
• Valuation approaches
• Practical examples

15.20 - 15.40 Break - Refreshments

15.40 - 17.00 Transfer Pricing of Intangibles (continued)

 
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 v 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 - Refreshments

10.50 - 12.45 Cost Contribution Agreements (continued)

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 - Refreshments

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 - Refreshments

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 - Refreshments

15.50 -16.40 Foreign exchange and derivatives

• Types of foreign exchange transactions
• Marco hedging
• Internal netting
• Payment factory

16.40- 17.00 Summary Session: Developing a Financial Transaction Policy

Monica Erasmus-Koen, PricewaterhouseCoopers,the Netherlands; Clive Jie-A-Joen, Ernst & Young, the Netherlands; Michel van der Breggen, PricewaterhouseCoopers, the Netherland;