An Introduction to Transfer Pricing - Modular Webinar Series

Introduction

Transfer pricing has never been more relevant and topical in the context of the globalisation of economies, governments seeking to increase revenues to support public spending pre and post COVID and the OECD’s continuing work in relation to BEPS and digital economy challenges.

Public/NGO interest also remains high in relation to multinationals’ tax contributions and this will likely only increase further with upcoming public country by country reporting across the EU.

This 6-part modular webinar series will look at all the key aspects of transfer pricing beginning with the basics of UK transfer pricing and providing an insight into other regimes.

This topic may appeal outside of the UK to those dealing with a UK entity that is one of the parties to a transaction with a non UK entity.

What You Will Learn

This webinar series will cover the following:

Module 1 - What is Transfer Pricing

This module will cover UK legislative principles and in particular will consider the following:

• What is UK transfer pricing
• What the UK requirements are in general and in relation to specific income (e.g. intangibles and loan relationships)
• UK exemptions from mandatory transfer pricing and exceptions to the exemptions
• Transfer pricing in the context of permanent establishments
• What are corresponding adjustments and when can you make them
• Comparisons and observations of transfer pricing in France, Germany and the US

Module 2 - Approach to Transfer Pricing - The Fundamental Steps

This module will cover consider the OECD authorised approach to transfer pricing, the relative importance of the legal terms to a transaction and the fundamental steps to take before jumping to transfer pricing method selection and undertaking economic analysis/benchmarking.

In particular this module will cover:

• Guidance for applying the arm’s length principle
• What is functional analysis and practical tips for undertaking functional analysis
• Approach to understanding and allocating risk
• Approach to understanding and applying a Development, Enhancement, Maintenance, Protections and Exploitation (DEMPE) analysis
• Characterising transactions and entities (e.g. ‘limited risk distributors’ and ‘entrepreneurs’).

Module 3 - Transfer Pricing Methods - Look Before You Leap

This module will consider the OECD transfer pricing methods, what to consider before selecting a particular method and then pricing transactions.

It will include:

• Steps to take in establishing comparability
• The 5 recognised OECD transfer pricing methods and when to apply them
• Use of databases and comparability adjustments
• Ex-ante v ex-post pricing

Module 4 - Financial Transactions - All that Glitters is not Gold

This module will consider some of the basics to approaching financial transactions and more advanced aspects of transfer pricing including:

• The UK’s approach to financial transactions, loans and thin capitalisation (including loans which may be performing an equity function)
• Interaction between transfer pricing and withholding tax on loans
• Considering and pricing intercompany guarantees
• Common cash pooling arrangements and pricing for the use of and contributions to a cash pool

Module 5 - Transfer Pricing Dispute Prevention & Resolution -Forewarned is Forearmed

This module will explore UK and international tax dispute prevention and resolution. It will consider how taxpayers can plan ahead to prevent transfer pricing disputes and, should a dispute occur, how to manage the outcomes.

In particular the following will be considered:

• What good UK transfer pricing documentation looks like
• The use of Advance Pricing Agreements and Advance Thin Capitalisation Agreements
• An overview of HMRC’s Profit Diversion Compliance Facility
• Practical advice in relation to handling transfer pricing enquiries
• An overview of the double tax treaty Mutual Agreement Procedures

Module 6 - International Transfer Pricing - Useful Case Studies

This module will provide an update on some key international cases which could be persuasive in the UK.