Transfer Pricing Documentation
This article is accompanied by a slide presentation on YouTube. Feel free to use my material for your own in-house purposes, all I ask is that you acknowledge the source. Read the rest of this entry »
Until recently I was a Senior Transfer Pricing Specialist with HM Revenue & Customs. I have HMRC TP risk-assessing and case-working experience for most business sectors and transaction types and was a member of HMRC’s TP Governance Panel, which has the final say on most TP enquiries.
I have now decided to specialise in helping MNEs and their advisers prepare their “final” TP documentation for HMRC eyes.
You may think your TP Documentation is clear and complete; but HMRC may think otherwise. Many TP enquiries are opened or extended by HMRC because the full facts and circumstances of the business and its transfer pricing are absent from or not clearly presented in the documents provided. Ironically, on establishing the facts it often becomes clear to HMRC that the pricing is actually at arm’s length and the enquiry can be closed without adjustment. Unfortunately, considerable time and money will have been expended on the enquiry in the meantime.
Such enquiries can be avoided or cut short.
I can “sense-check” your TP documentation; issues that might otherwise trigger “TP risk” alarm bells within HMRC will be identified and can be corrected, clarified or expanded as required, before submission to HMRC, to better demonstrate your principled and objective approach to achieving the appropriate arm’s length pricing.
To find out how I can help you please use the “contact me” tab above or email me directly.
Gordon McLeman 08 December 2017
In this recent transfer pricing case the Dutch Courts reduced the tax authority’s adjusted assessment of €188.3m down to €32.1m
The basic facts are:
- A Dutch parent company had provided services to foreign subsidiaries on a cost-plus basis.
- The parent received compensation when a business restructuring transferred its HQ and strategic functions to Switzerland.
- The Dutch Tax Authorities concluded that this compensation was not enough and that the parent continued to perform strategic functions for the group.
However, the Court ruled that:
- the parent had fulfilled its legal obligations by preparing thorough transfer pricing documentation.
- that the burden of proof was on the Dutch tax authorities and
- the tax authorities did not provide sufficient arguments to support their adjustment.
This outcome illustrates the importance of ‘preparing thorough transfer pricing documentation’ and, although it’s a Dutch example, the principle holds good across jurisdictions.
If you are interested in finding out how your TP documentation might fare if audited by HMRC then read on…… Read the rest of this entry »
Originally published by Grant Thornton UK LLP, 9 May 2016
Reinsurance is a common connected-party transaction for groups operating in the insurance sector. This 2016 article from Grant Thornton discusses a key change to the OECD Transfer Pricing Guidelines arising from BEPS and how it impacts the transfer pricing of intra-group reinsurance.
The article concludes that “for many groups there is unlikely to be a sea change in the transfer pricing analysis performed, but there will be a greater level of documentation and evidence required to support the nature of the analysis performed.”