3. Addressing Challenging Transfer Pricing Items which Arose from BEPS - Enrique Rayon
Value Chain Analysis • The arm’s length principle and value creation, not formulary apportionment • Value Creation ≠ Value Chain Analysis • Selected countries require a value chain analysis is to be included in transfer pricing documentation, e.g., CN, NL, etc. • How and where is value created in the company? • VCA ≈ Art+Science • Delineate the intercompany transaction • Functional analysis (functions, risks, assets) • Economic Value of functions/risks/assets, again, not a formulary profit allocation Transfer Pricing | 2017
Value Chain Analysis Conventional Supply Chain Manufacturing Co. (Country A) Distribution Co. (Country B) Customers : Sales of Products Transfer Pricing | 2017
- Page 1 and 2: Thinking about your business is a b
- Page 3 and 4: Introduction • “The BEPS projec
- Page 5: Transfer Pricing Documentation •
- Page 9 and 10: Profit Split • Transactional prof
- Page 11 and 12: Profit Split π Typical Allocation
- Page 13: Thank you for your attention. Trans
Value Chain Analysis<br />
Conventional Supply Chain<br />
Manufacturing<br />
Co.<br />
(Country A)<br />
Distribution<br />
Co.<br />
(Country B)<br />
Customers<br />
: Sales of Products<br />
<strong>Transfer</strong> <strong>Pricing</strong> | 2017
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