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Transfer Pricing Implications on Cross-Border Intercompany Services, Financing and Royalties

Practical Insights in Mitigating Transfer Pricing Risks

Expert Speaker Dr Sowmya Varadharajan

$856.00 (including GST)

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EARLY BIRD SPECIAL: Save 10% when you register by 21 Feb 2019. Use code FEB19 at checkout.

Overview

Tax authorities in particular scrutinise intercompany service and royalty payments.  A main reason for this is that it is often difficult to accurately estimate the “arm’s length nature” of these transactions.  In addition, tax authorities are particularly concerned with these transactions as the payment of such fees are typically considered to be eroding the tax base in their jurisdiction. 

With globalisation, these transactions are on the rise, which raises a dichotomy of views between the taxpayer and the tax authority. Hence, rightly structuring and managing transfer pricing exposures that arise from intercompany service, financing and royalty transactions is a key challenge for the regional finance team to address.

This workshop is designed specifically to give Finance and Tax Professionals a practical understanding of how to handle the transfer pricing aspects of cross-border intercompany services, financing and royalty transactions. Furthermore, given that any related party transaction needs to be evaluated from a payer and payee perspective, this programme will also cover the transfer pricing treatment of cross-border intercompany services and royalties in selected countries such as China, Indonesia, India and Malaysia.

What You Will Learn

At the end of this workshop, you will:

  • Understand how cross-border intercompany services, financing and royalties should be structured from a transfer pricing perspective
  • Get practical pointers on managing the transfer pricing exposures arising from intercompany services, financing and royalty transactions from a transfer pricing documentation perspective
  • Learn best practices on how to mitigate transfer pricing risks ​

Programme Outline

Examining the Importance of Cross-Border Intercompany Services, Loans and Royalties

  • Why are these forms of intercompany services increasingly important to the overall functioning of the company group?
  • Why are tax authorities’ increasingly scrutinising these cross-border intercompany transactions?
  • Review of key BEPS related changes to transfer pricing guidelines and its impact on intercompany services, loans, and royalties
  • Key considerations for the structuring of intercompany services, loans and royalty transactions in managing transfer pricing risks

Transfer Pricing Considerations for Cross-Border Intercompany Services

  • Transfer pricing methods applicable to intercompany services
  • Applying the benefits test for intercompany services
  • Determination of cost base
  • Determination of arm’s length pricing

 

A Discussion on Tax Authorities’ Positions on Cross-Border Intercompany Services: A Transfer Pricing Perspective

  • Evaluate routine support services and its cost pooling arrangements from the Singapore Transfer Pricing Guidelines
  • Examining recent guidance provided by tax authorities in India / China / Malaysia and Indonesia on cross-border intercompany services

 

Understanding Cross-Border Intercompany Royalties

  • Overview of the various royalty models
  • Understanding the applicable transfer pricing methodologies

 

Guidance on Intangible Property from Base Erosion and Profit Shifting (“BEPS”) Action Plan

  • Understanding of the Development, Enhancement, Maintenance, Protection, Exploitation (“DEMPE”) activities

 

Understanding Intercompany Financing Transactions 

  • Overview of the intercompany financing models (e.g., intercompany loans, cash pools, finance and treasury centres)
  • Understanding the applicable transfer pricing methodologies
  • Benchmarking strategies

 

A Recap on Key Takeaways: Transfer Pricing Implications on Cross-Border Intercompany Services, Financing and Royalties

Expert Speaker

Dr Sowmya Varadharajan, Director, Crowe Horwath Singapore, has more than 15 years of experience in transfer pricing consulting work.  Having been trained in the U.S. on international tax and transfer pricing issues through blue-chip corporations, Sowmya now applies her transfer pricing training to transfer pricing issues in the Asia Pacific region.  Sowmya has extensive experience in the high technology/semiconductor as well as pharmaceutical/biomedical industries.  In addition to transfer pricing, Sowmya is also skilled in IP valuation.  With the growth in transfer pricing related audits in the Asia Pacific region, Sowmya has assisted clients in India, China, Malaysia, Indonesia and Singapore in defending their transfer pricing arrangements with tax authorities. Sowmya is an economist with Ph.D. in Economics from Cornell University

Enquiries: 6211 3935; amy.wong@wolterskluwer.com / 6211 3939; sandi.teoh@wolterskluwer.com  

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