Five key themes from TP Minds Americas
Here’s a very brief report of five key themes from the conference:
1. The increasing importance of sustainability and ESG (Environmental, social, and corporate governance) in transfer pricing
This is an emerging issue in transfer pricing, and includes matters such as intercompany carbon pricing, allocation of sustainability costs and the valuation of ‘sustainability IP’. We continue to work with corporates and TP professionals in this area, and we'll share insights and views from a legal perspective in the coming weeks and months.
2. The rise of tax insurance (which can include TP risks)
According to a presentation by Sheldon Elefant of WTW, the total capacity of the tax insurance market now exceeds $1.5 billion for any single tax risk. There are apparently over 20 primary and excess carriers, which creates a competitive pricing environment. Interestingly, high risk areas from an insurance perspective include the separation of legal ownership of IP from DEMPE functions.
3. Managing remote and mobile workforces
The TP implications of managing remote and mobile workforces continues to be perceived as a key tax risk and major headache for many corporate groups. The complexities involved include not just TP policies and PE risks, but also payroll compliance and tax risks for individuals.
4. The need to ‘present a consistent picture’ regarding TP policies
This is not a new issue, but it is a persistent one and arguably a natural development of the themes of ‘substance’, ‘documentation’ and ‘evidence’ which have transformed the TP world over the last five years and more. Consistency does not just relate to formal documentation and agreements, but also PR announcements and the LinkedIn and other social media profiles of individual members of staff.
5. Intercompany agreements
It’s not just us talking about this! Almost every session emphasised the importance of ensuring that TP policies are implemented in legal reality through appropriate intercompany agreements.
Part of our mission at LCN is to make a positive contribution to the whole of the international corporate, tax and legal community. So if you’d like to talk to us about any of these issues with a view to helping to share best practice, please do reach out.
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