Advanced Intercompany Agreements for Transfer Pricing - Complex Issues & Practical Challenges

Introduction

Intercompany agreements are an important part of a robust transfer pricing framework, but having an agreement in place does not, by itself, ensure that a group's transfer pricing arrangements are defensible.

Tax authorities will increasingly look beyond the written contract to determine whether the terms of an intercompany arrangement reflect the actual conduct of the parties, the functions performed, assets used and risks assumed.

What happens when the agreement says one thing, but the business does another? How should agreements deal with changing functions, unexpected losses, valuable intangibles or complex financial arrangements? And when should existing agreements be revisited?

Delivered by expert speaker Rafaela Oplopoiou-Chapman, this advanced live and interactive session will explore the more challenging aspects of drafting, reviewing and maintaining intercompany agreements from a transfer pricing perspective.

Designed as a follow-on to Intercompany Agreements for Transfer Pricing Compliance, this session is aimed at tax advisers, accountants, lawyers and in-house tax and finance professionals who already understand the fundamentals and want to consider more complex arrangements and practical risk areas.

What You Will Learn

This live and interactive session will cover the following:

• Agreement versus actual conduct - Which prevails?
• Accurate delineation of the transaction
• Written contractual terms versus economically significant conduct
• Functions, assets and risks
• What happens when contractual risk allocation is not supported by conduct?
• Identifying inconsistencies between agreements, transfer pricing policies and operational reality
• Drafting agreements for complex transfer pricing arrangements
• Moving beyond standard template agreements
• Aligning contractual terms with the functional analysis
• Limited risk distributors and contract/toll manufacturers
• Service arrangements and management charges
• Intangible property and licensing arrangements
• Financial transactions
• Selecting provisions that reflect the actual commercial arrangement
• Intercompany agreements and risk allocation
• Contractual assumption of risk
• Financial capacity to assume risk
• Control over risk
• How changes in functions can affect contractual arrangements
• Loss-making entities and challenges to limited-risk structures
• Unexpected events and changes in commercial circumstances
• Intangibles and intellectual property
• Legal ownership versus entitlement to returns
• Reflecting DEMPE functions in agreements
• Licence and royalty arrangements
• Development and exploitation of intangibles
• When agreements may not support the allocation of IP-related returns
• Financial transactions - Advanced agreement issues
• Intercompany loan agreements
• Interest, repayment and maturity terms
• Guarantees and implicit support
• Cash pooling arrangements
• Treasury arrangements
• Ensuring contractual terms align with the accurately delineated transaction
• Business restructuring and changes to existing arrangements
• When an existing agreement needs to change
• Changes in functions, assets and risks
• Termination and renegotiation
• Transfers of functions and valuable rights
• Compensation and exit charges
• Updating agreements following business restructuring
• Reviewing existing intercompany agreements - A practical health check
• Do agreements reflect what happens in practice?
• Consistency with transfer pricing documentation
• Consistency with accounting records and invoicing
• Identifying missing or outdated agreements
• Common drafting weaknesses
• Creating an effective review and governance process
• What evidence should be retained?
• Practical case studies

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.