It is often said that transfer pricing is not an exact science, hence to develop an understanding of transfer pricing principles and methodologies, consideration of their practical application is considered paramount. This 5 day intermediate level course introduces participants to transfer pricing principles and methodologies and then covers the application of these principles and methodologies to specific categories of intra-group dealings. These sessions are complemented by practical sessions that cover the application of the principles and methodologies in practice. The focus of this practically orientated course is on the requirements of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations and the issues that can arise in the application of these requirements.

This course serves as good preparation for the CIOT's ADIT Paper III - Option F and Transfer Pricing certificate. (www.tax.org.uk/adit)

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.

Day 1


08.30 - 09.00 Registration

09.00 - 09.20 Welcome and IBFD Overview

09.20 - 11.00 Introduction to Transfer Pricing


• What is transfer pricing?
• The importance of transfer pricing
• Article 9 of the OECD and UN MTCs
• The OECD Transfer Pricing Guidelines for Multinational Enterprises
• Associated Enterprises
• Applying the arm’s length principle
• Selected examples of domestic transfer pricing law

11.00 - 11.20 Break

11.20 - 12.45 Transfer Pricing Methods


• Transaction-based methods
- Comparable Uncontrolled Price (CUP)
- Cost-Plus method
- Resale Price method
• Profit-based and other methods
- Profit Split method
- Transactional Net Margin method (TNMM)
- Other methods
• Compensating Adjustments
• Practical examples
• Case study

12.45 - 14.00 Lunch

14.00 - 15.20 Transfer Pricing Methods (continued)


15.20 - 15.40 Break

15.40 - 17.00 Transfer Pricing Methods (continued)

 

Day 2


09.00 - 10.30 Comparability Analysis


• Comparability factors
• Establishing search criteria
• Conducting a comparability study
• Sources of information and utilising databases
• Practical examples/case studies

10.30 - 10.50 Break

10.50 - 12.45 Administrative Approaches to Avoiding and Resolving Transfer Pricing Disputes


• Economic double taxation
• Corresponding adjustments
- Article 9 OECD MTC
• Secondary Adjustments
• Mutual Agreement Procedure
- Article 25 OECD MTC
• Penalties
• Advance Pricing Arrangements

12.45 - 14.00 Lunch

14.00 - 15.20 Case Study


15.20 - 15.40 Break

15.40 - 17.00 Transfer Pricing Documentation


• Content and purpose
• OECD guidelines
• US Documentation
• European master file
• PATA documentation
• When should documentation be available?




Day 3


9:00 - 10:30 Intra-Group Services and Cost Contribution Arrangements


• Introduction
- Business models
- OECD approach
- Relationship between ICS & CCA
• Types of intra-group services/common services
- Shareholder activities and genuine intra-group services
- Allocation keys
- Choice of transfer pricing method
• Funding of the services & activities at arm’s length
- Direct charge
- Indirect charge
• Transfer pricing method
- Service charge computation
- Documentation
• Cost sharing arrangements
• Case study

10.30 - 10.50 Break - Refreshments

10.50 - 12.45 Intra-Group Services and Cost Contribution Arrangements (continued)

12.45 - 14.00 Lunch

14.00 - 15.30 Intra-Group Finance Transactions


• Importance of intra-group finance transactions
• Types of intra-group finance transactions
• Establishing an arm’s length interest rate
- Comparability factors to consider
- Importance of a stand-alone credit rating
- Base rates and credit spreads
• Guarantee fees
- When to charge a guarantee fee
- How to establish a guarantee fee
- Implicit parent guarantee
• Developing a loan pricing policy
- Consistent approach on interest rates
- Meeting transfer pricing documentation requirements
• Transfer pricing risks and planning opportunities
• Case study

15.30 - 15.50 Break

15.50 - 17.00 Intra-Group Finance Transactions (continued)



Day 4


09.00 - 11.00 Transfer Pricing and Intangibles


• Defining intangibles
• Identifying intangibles
• Categories of intangibles
• Manufacturing and marketing intangibles
• Royalty determination
• Pricing methods
• Pricing intangible transfers

11.00 - 11.20 Break

11.20 - 12.45 Managing the Customs-Transfer Pricing Nexus


• Does the arm's length price equate to the customs value?
• Valuation in tax and customs: similarities and differences
• Developments

12.45 - 14.00 Lunch

14.00 - 15.20 Transfer Pricing Risk Management

• What is risk management?
• Sources of transfer pricing risk
• Risk embedded within Transfer Pricing
• Role of Transfer Pricing within a MNE
• Transfer Pricing and tax effect accounting issues
• A framework for Transfer Pricing risk management

15.20 - 15.40 Break

15.40 - 17.00 Case Study


Day 5


09.00 - 11.00 Permanent Establishments

• The PE concept: Article 5 OECD and UN Model Tax Conventions
• Article 7 OECD Model Tax Convention
• The attribution of profits under the 2008 OECD rules
• The attribution of profits under the 2010 OECD rules
• The problematic capital attribution
• The controversial agency PE

11.00 - 11.20 Break

11.20 - 12.45 Permanent Establishments (continued)


12.45 - 14.00 Lunch

14.00 - 15.20 Business Restructuring

• Business restructuring from a transfer pricing standpoint
• The application of the arm’s length principle to business restructuring
• The concept of “Transfer of Functions”
• Common types of business restructuring
- Distribution activities
- Manufacturing activities
- Intellectual Property
- Services
• Recent Developments
- OECD
- Domestic Law examples
• Case Study

15.20 - 15.40 Break

15.40 - 17.00 Business Restructuring (continued)

Antonio Russo, Baker & McKenzie, the Netherlands; Ronald van den Brekel, Ernst & Young, the Netherlands; Tim Brierley, GE, the Netherlands and Danny Houben, Shell, the Netherlands; Michel van der Breggen, PricewaterhouseCoopers, the Netherlands); Jasper H