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The five women who inspire me the most

What Jim Rohn would say to a Mum Entrepreneur?

Two books that helped me stop being a guilty and exhausted working mother

The Chinese Mums in Business Club is Launched

How to be a treasurer

Dealing with franchising in TP documentation

My day with the tax guns

Pain and gain in intra-group supplies

What does the IRS say about the role of intercompany agreements in TP audits?

This lady had no sympathy for transfer pricing advisers

‘Neither donkey nor horse’ – or why MNEs often have dysfunctional ICAs

Our top 5 pet hates when it comes to Transfer Pricing reports

5 books worth reading this summer for Mothers in Business

5 things people forget when it comes to Intercompany Agreements

The 5 inspirational quotes I am living by….

Consequences of lack of legal documentation of intercompany financial transactions

What's the relationship between Intercompany Agreements and Functional Analysis for TP?

"Bad and better"

"Aggressive and Comprehensive"

Webinar: Intercompany Agreements for Transfer Pricing compliance

The five women who inspire me the most

Happy International Women’s Day everyone! Wherever you are, whoever you are (daughter, mother, sister, mother of daughters and father of daughters etc), today is not only a day to celebrate women and girls worldwide, it is a day to celebrate equality, fairness and humanity.
We’ve been on the planet for a long time and women have only recently been given the opportunities we so deserve. International Women’s Day was big and widely celebrated in China when I was growing up. One of my childhood memories was that my mum would have a day off on 8th March and feel very proud. Her mother was a hardworking uncomplaining homemaker all her life. Watching them live their lives was like holding a mirror up to the limitations that could easily have been mine. My mum has been a great supporter of me pursuing my dreams. And I am so grateful that I am living in a country which has such a long history of respecting and celebrating women.
To celebrate this year’s International Women’s day, I list the five women who inspire me the most; who I look up to and make me feel humbled; who remind me how incredibly lucky we are as women.

  1. Sara Blakely, mum of 4 and the inventor of SPANX. She is fearless, grateful, funny and so real. Just like her husband said on her birthday: “Wife, Mum, Daughter, Sister, Boss, Philanthropist. She wears so many hats…and wears ALL with love and class.” If you follow her on Instagram, you will know what I mean. My favourite quote of hers is “Be Scared and Do it Anyway!”.
  2. Michelle Obama, the former First Lady of United States. She is authentic and she is the girl from the South Side. She is the ultimate role model for all working mothers. As she mentioned in her book ‘Becoming’:” Motherhood became my motivator. It dictated my movements, my decisions, the rhythm of every day.” She struggled to keep her work and life balance. She was the default parent for looking after the children when they were little. She used to get up at 4:45am so that she could join a girlfriend for a 5am workout and then be home by 6:30am to get her girls up and ready for their days. This routine gives her back the calmness and strength, two things she feared she was losing. She is one of us!
  3. Ellen DeGeneres, the American comedian and the host of “the Ellen Show”. She is undeniably funny with a big heart full of love and acceptance. She speaks loudly about the fact she is a married lesbian. She contributes to this world by making people laugh, giving normal people generous surprises and building a campus in Rwanda to protect critically endangered mountain gorillas. She lifts my spirit up every time I see her.
  4. Mimi Thorisson, the half Chinese and half French food book author and mom of 8 (2 of them are step children). She created the famous food blog http://mimithorisson.com alongside her photographer husband. They live in Medoc, France with their children and countless dogs. The thing I admire about her and her husband is that they somehow manage to live their everyday like their last day – full of good food, good wine, children running around with dogs in a big French countryside house. My favourite quote of hers is that “I am not good at deadlines. I am happy just to stop whenever my children need me.” What a spontaneous way to live and she lives it beautifully and peacefully!
  5. Emma Watson, the Hermione Granger we know so well and the beauty from “the beauty and beast” later on. She is also a book lover who hides books in tube stations for fellow bookworms. Most importantly, she is one of the most famous campaigners for women’s rights. She is also one of the youngest members of the Gender Equality Council advising the G7 this year during the French Presidency. As a mother of 3 daughters, I feel so grateful that a public figure like Emma devotes so much time to giving women and girls’ rights the prominence that they should have!

Which women inspire you at this moment? Don’t forgot to inspire others women whenever you can as we are all sisters living on the mother earth.

What Jim Rohn would say to a Mum Entrepreneur?

Jim Rohn
My husband and I have this habit of asking the question of what a famous successful public figure would say or do if he/she was in our situation.
Last week, I was having one of those days where I was trying to finish work on time and get to the bottom of that never ending to do list, but I didn’t. Everything after that was just a blur for me; I rushed to pick up the big kids from school and the baby from nursery; left – overs from last night calmed the screaming hungry crew. I was clearly having a silent melt down.
Stopping me in the midst of a very compelling feeling ‘sorry for myself’ routine talk that happens when you have days like this one, my husband Paul stopped me in my tracks, and asked me what Jim Rohn would say to me at this very moment…

Here are the 10 quotes I think Jim Rohn would want to remind me of

  1. Success is nothing more than a few disciplines practiced every day.
  2. The only way it gets better for you is when you get better. Better is not something you wish, it’s something you become.
  3. All leaders are readers.
  4. Successful people do what unsuccessful people are not willing to do.
  5. Don’t wish it was easier, wish you were better. Don’t wish for less problems, wish for more skills. Don’t wish for less challenges, wish for more wisdom.
  6. Take care of your body. It’s the only place you have to live.
  7. Learn how to be happy with what you have while you pursue all that you want
  8. Let others lead small lives, but not you. Let others argue over small things, but not you. Let others cry over small hurts, but not you. Let others leave their future in someone else’s hands, but not you
  9. If you are not willing to risk the usual you will have to settle for the ordinary.
  10. Don’t spend major time on minor things

Which quote of Jim Rohn inspires you the most at this very moment?

Two books that helped me stop being a guilty and exhausted working mother


It is a never ending conversation among my fellow women/mother entrepreneurs, colleagues in the professional world on the topics of “Can we women (even more strongly, mothers) have it all?” and “Do we ask too much when we want a fulfilling job we love and at the same time the family life our female instincts are longing for?”
Are you like me, sometimes or the majority of time, you feel like a worn-out super girl buried under guilt and exhaustion and still refusing to take the damn super girl outfit off?

We are women, we are mothers, and we are also entrepreneurs, business leaders, colleagues and home makers. The roles we carry together can either be a recipe for a manic, stressful and chaotic life, or a powerful combination to inspire us to be more. Like Jim Rohn says:“The greatest value in life is not what you get; the greatest value is what you become.” This leads to the question of “what does have it all mean to us?” From my experiences of talking to countless inspiring mothers, it doesn’t simply mean keeping our jobs while having children in tow. It is more about mental satisfaction from being self-expressed through work and motherhood, and even more precisely, from “being more” through those journeys.
What does “being more” mean here? It could mean:

  • We each embrace our role as a contributor to our work place even as a leader of a growing business, without feeling frustrated, tired and unwilling to take on any more risk.
  • We each take responsibility for ensuring that everyone in our company is clear about our big vision, and is rowing the boat in the same direction.
  • We are working on the business to create documented systems so that we can confidently let go of the reins when our children need us without feelings of guilt or conflict.

The good fortune we have as women is that we can handle so much and we don’t give up. I am glad that I am one of them and I am raising three daughters to join them. With this in mind, not giving up the desire of  having it all has lead me to find the following two books which have helped me to redefine my daily routines and my work life; and most importantly, the first time it feel like I am having it all and we all can have it all.
The Seven Spiritual Laws of Success by Deepak Chopra — we women are so prone to the twin enemies fear and worry; we are constantly evaluating, classifying, labelling and analysing which is why we love gossip and chatting. But all this creates a lot of turbulence in our internal dialogue. We worry about our children, our husbands (can also be classified as our another child), our parents, our friends and then the last ourselves! American writer and founder of Success Magazine, Dr. Orison Swett Marden identified FEAR and WORRY as the two most powerful enemies of peace of mind, health and prosperity because they undermine everything.  This book gives us practical guidance to calm our mind down and help us to access the true potentiality already within us. It sounds cliché but it is true and a must read!
Traction by Gino Wickman — the past 8 weeks has been an incredible journey for me and our team at LCN as we embraced the tools from the Traction book to give us more clarity as individuals and as a company at large. The most beneficial thing for me in this is that I finally have a grip on our business and with the documented systems in place, it means I can physically and mentally can let go of the reins when my children need me without feeling guilty and exhausted. To all the mum entrepreneurs and managers, working more time doesn’t make you a productive achiever. Less is more if you have the right systems.
We’ve all had moments when the juggling didn’t work, when the wheels all fell off, and that’s OK! It’s about having the clarity of what “having it all” means to you specifically. It’s about what you want to become through this life journey of yours. It’s about learning to prioritise the balls we are juggling and knowing when to say no. Just remember that ‘have it all’ doesn’t mean we do everything ourselves. We can’t do everything and we shouldn’t feel guilty if we don’t. We also shouldn’t feel guilty if we ask for help (or have a cleaner or nanny, etc). Nor should we judge other women if they do!

The Chinese Mums in Business Club is Launched


In June 2018, I was most delighted to co-launch the Chinese Mums in Business Club (CMIBC) with my amazing Co-Founder, Sally Maier-Yip.
The CMIBC is an independent networking organisation for Chinese (and culturally Chinese) mums in business, either running their own business or working in an organisation, in the UK and worldwide.
Through our annual programme of special moments and events, our vision is to Inspire and Empower Chinese mums in business to reach their full potential.
Inspired by the ‘Mastermind’ meetings described in the classic book ‘Think and Grow Rich’, our intention is that our ongoing meet-ups will be an opportunity to share our business challenges, ask for guidance and different perspectives and discover new and possible solutions. And most of all, our collective knowledge and expertise from different business sectors and mutual coaching will:
1: Create a fun, loving and inspirational place for Chinese mums to network and social and seek support in a safe, confidential and supportive environment.
2: Represent a voice from those mums and create opportunities for Chinese mums to meet other culture background mums in business.

OUR NEXT EVENT
On 20th November, we are organising our second working lunch for Chinese mums who are running their own business. Click here for the full invitation.
In this working lunch, we will share real-life experiences from our personal journeys to create documented systems, including accountability charts and weekly scorecards – and results and challenges so far (the good, the bad and the ugly). We would love to hear your own stories of how you have worked “on” your business rather than “in” your business, and which approaches have worked for you.
If you are interested in joining us on 20th November, do drop me an email: xiaofang.sutton@lcnlegal.com. Seats are very limited. We look forward to hearing from you soon.
With our very best wishes,
Xiaofang Sutton and Sally Maier-Yip 
Co-Founders, The Chinese Mums in Business Club
Join us on LinkedIn: https://www.linkedin.com/company/cmibclub/ 

How to be a treasurer

This was remark from Coco, our just-turned-7 year old daughter: “I need a box, to treasure things in.” It made me realise that I don’t often use the word “treasure” as a noun, let alone as a verb.

So here’s a Monday morning question for you, inspired by Anthony Robbins: What are your most treasured memories in your career so far? And what treasured memories could you choose to create this week, if you wanted to?

If you work with technology-focussed groups, and you treasure the opportunity to expand your knowledge about intercompany agreements and transfer pricing compliance, you’ll want to join the free webinar that we’re holding on 11 October. You can find out more and reserve your place here.

Dealing with franchising in TP documentation

Intra-group franchising arrangements are not uncommon, and we’ve recently been helping two multinational groups with their intercompany franchise agreements.

For one of those clients, we were provided with a benchmarking report produced by one of the ‘Big Four’ firms, which attempted to provide guidance as to an appropriate franchise fee. The report was curious in two respects: first, it identified only 7 ‘comparable’ third party agreements (3 with one franchisor, 2 with another franchisor, and 1 with a third franchisor). Secondly, there was no consideration of the terms of the client’s franchise arrangements, and in what respects they were actually comparable.

This particular benchmarking report therefore appears to have ignored one of the basic requirements for comparability, as set down in the OECD’s 2017 Transfer Pricing Guidelines:

The economically relevant characteristics or comparability factors that need to be identified in the commercial or financial relations between the associated enterprises in order to accurately delineate the actual transaction can be broadly categorised as follows: … the contractual terms of the transaction … .” (Underlining added)

The issue is particularly acute in the case of franchising. In real-life, third party arrangements, the term ‘franchising’ covers a multitude of different scenarios. Very different levels of support may be provided by a franchisor, and very different levels of risk may be assumed by the franchisee. This is evident from the 20 plus items required to be included in a ‘Franchise Disclosure Document’ under US law. (The UK has no equivalent disclosure regime.) Many of those items are legal in nature, including the treatment of training and advertising costs, the sourcing of products and services for use by the franchisee, and the obligations of the parties generally.

If you need help creating or reviewing intercompany agreements for transfer pricing compliance, call us on +44 20 3286 8868 or email us at info@lcnlegal.com to arrange a free, no-obligation consultation.

My day with the tax guns

Unannounced tax audits may be a fact of corporate life – but you wouldn’t necessarily expect them to involve firearms. This is the subject of an article very kindly contributed by Ian Barron, the former Vice President and Head of Corporate Tax at American Express for the EMEA Region:

“I’ve had some interesting and amusing experiences handling many tax audits in many countries but one in particular in Southern Europe makes me smile now, but didn’t at the time. Ironically, it wasn’t even a planned audit but an unannounced routine visit which unfortunately coincided with my arrival from the UK for meetings with local colleagues on a variety of tax matters.”

To read the full story as recounted by Ian, click here.

If you know your intercompany agreements for transfer pricing compliance would not withstand the scrutiny of a tax audit, we can help. Call us on +44 20 3286 8868 to arrange a free, no-obligation consultation.

Pain and gain in intra-group supplies

If you’re a fan of Anthony Robbins you’ll know that he regards ‘pain’ and ‘pleasure’ (or rather, the anticipation of pain or pleasure) as keys to consciously controlling our destiny. We can actively choose to associate massive pleasure with habits or beliefs we want to install, and massive pain with habits or beliefs which do not serve us.

In relation to the legal structure of multinational groups, evaluation of ‘pain’ and ‘pleasure’ (or gain) can similarly be used as a guiding principle to help assess the terms of an intercompany agreement, and whether a written agreement is required at all (aside from procedural requirements of BEPS compliance and local regulatory or tax laws). I believe this mirrors the way we view contracts in our business and personal lives – and whether we just click “I agree” when faced with yet another set of terms and conditions online, or whether we stop and get legal advice on a strategic business relationship.

For any given intercompany supply, the perspective of avoiding pain and securing gain can be applied from either end of a supply relationship – but more commonly, from the perspective of the legal entity which is not acting as ‘entrepreneur’ (on the basis that the entrepreneur is entitled to the residual profits arising from the underlying economic activities).

The following questions may be helpful:

‘Pain’

What’s the worst that could happen in the context of this relationship? E.g.:

‘Gain’

What’s the expected benefit that contractual terms could secure? E.g.:

If none of the issues raised by those questions is material (judged at the level of the legal entity involved, not merely at group level), then a written agreement may not be required. If material issues are raised, then the officers of the relevant legal entity are likely to be under personal duties to clarify the relationship by means of a written agreement, in order to be able to manage the risks involved.

If you’re anticipating potential pain because you know your transfer pricing compliance lacks the legal substance provided by appropriate intercompany agreements, we can help. Call us on +44 20 3286 8868 to arrange a free, no-obligation consultation.

What does the IRS say about the role of intercompany agreements in TP audits?

The US Department of Treasury recently (June 2018) updated its ‘Transfer Pricing Examination Process’, which is a guide to best practices and processes to assist with the planning, execution and resolution of transfer pricing examinations carried out by the IRS.

The guidance divides the work of a TP audit into three phases:

As you would expect, the guidance document highlights the need to review relevant intercompany agreements, as part of Phase II. This involves not just a cursory review of terms, but an assessment of the allocation of contractual risks, with the benefit of legal advice.

Here’s an extract from page 21 of the guide:

“The issue team should perform a review and analysis of relevant intercompany agreements:

• Collaborate with LB&I [Large Business & International] Division Counsel to understand legal terms and content of intercompany agreements:

You can download the full guidance document here.

In case you haven’t already reserve your place: on 5th September we’ll be running a live webinar on Intercompany Agreements for TP compliance. It’s for Transfer Pricing professionals, international tax advisers, CFOs, in-house legal counsel, and anyone else who is responsible for ensuring that multinational groups have an effective TP compliance strategy which is rooted in legal substance.

The focus will be on how multinational groups can establish and maintain an appropriate system of Intercompany Agreements, based on our experience of working with clients in places such as Australia, China, Germany and the USA. The topics we’ll cover will include:

The webinar is free, but spaces are allocated on a first-come-first-served basis.

To reserve your place, click here.

This lady had no sympathy for transfer pricing advisers

A little earlier this Summer, Xiaofang and I attended a very lovely wedding party which was held in the oldest inhabited castle in England (apparently). I got talking to one of our fellow guests, and she very kindly asked what we do. ‘We help multinational businesses to maintain the legal structures they need to comply with international tax rules.’

It’s probably a mistake to talk about transfer pricing at wedding party, and the lady was firmly of the view that large corporates are all in the business of tax dodging. According to her, multinational groups deserve no sympathy for the difficulty of trying to satisfy multiple tax administrations which all want to tax the same profits. This is a very natural view to have, given the media coverage the subject of transfer pricing usually gets.

Despite my social faux pas, I welcome these conversations, because it reminds me why we do what we do, and why we should care enough to do it well. As far as I can tell, if we collectively want the benefit of technology and healthcare and so on, we need organisations which allow people to co-operate internationally. And those organisations naturally need the ‘corporate plumbing’ to allow them to comply (as far as possible) with the relevant legal and tax rules – which are equally necessary. So the world needs ‘corporate plumbers’ like us, as much as Obi-Wan Kenobi presumably appreciates a good pair of sandals (or was it boots?). And it’s our humble duty to fulfil our responsibilities as corporate plumbers to the best of our ability.

By good fortune, on 5th September we’ll be running a live webinar on Intercompany Agreements for TP compliance. It’s for Transfer Pricing professionals, international tax advisers, CFOs, in-house legal counsel, and anyone else who is responsible for ensuring that multinational groups have an effective TP compliance strategy which is rooted in legal substance.

The focus will be on how multinational groups can establish and maintain an appropriate system of Intercompany Agreements, based on our experience of working with clients in places such as Australia, China, Germany and the USA. The topics we’ll cover will include:

The webinar is free, but spaces are allocated on a first-come-first-served basis.

To reserve your place, click here.

‘Neither donkey nor horse’ – or why MNEs often have dysfunctional ICAs

Here at the LCN World Headquarters, we’re getting excited about running a webinar tomorrow on Intercompany Agreements (ICAs) for TP compliance. It will be for a team of TP advisers in China. One of the points we’ll be covering is why the quality of ICAs is often so poor – even for large multinationals – when the OECD’s TP guidelines clearly state that ICAs form the starting point of any TP analysis.

I believe one of the reasons for this is that the task of creating and maintaining ICAs often falls “between two stools.” The initial need for ICAs is often driven by tax compliance, but writing ICAs is not traditionally a tax skillset. It’s also not a traditional legal skillset, because the content of ICAs is so tax sensitive. That’s where we come in, as lawyers who help bridge the gap between ‘tax’ and ‘legal’.

According to my boss Xiaofang, there’s no direct equivalent in Chinese for the idiom “between two stools.” The closest seems to be “neither donkey nor horse”. Which would make us either a mule or a ‘hinny’. Clearly we need to think about that one a little more …

If you are a Transfer Pricing adviser or international tax adviser, and you would like to arrange an interactive webinar session for your team on how to put in place effective Intercompany Agreements, we would be happy to help. Just email us at info@lcnlegal.com, and we can arrange a time for an initial chat.

Our top 5 pet hates when it comes to Transfer Pricing reports

We have the luxury of reading a lot of Transfer Pricing reports, including master files and local files for BEPS compliance. We’re usually reading them with a specific purpose: to understand the structure of the intercompany supplies, and translate that structure into appropriate legal agreements. However, we also get to appreciate the reports as they are: the good, the bad and the ugly.

Here is a very personal view of top 5 pet hates when it comes to Transfer Pricing reports:

1. Too much repetition: Some TP reports seem to be written three times over. It wastes a lot of time for the reader, and surely it’s not good for the writer either – it increases the risk of error and ambiguity, if the same issues are described in slightly different ways.

2. Not enough pictures: yes, we are elite international corporate lawyers, but we’re also human. Pictures and diagrams really help to bring the underlying business to life, and communicate what makes it tick. And that’s surely what a TP report is all about, especially a master file.

3. Lack of a summary table of intercompany supplies / charges: again, this surely goes to the heart of what a TP report is about. But it’s not at all uncommon to find reports which lack a clear summary of which legal entities are making which types of supply to which recipient legal entities, and which pricing methodology has been applied

4. Lack of allocation keys for apportionment of costs between multiple recipients.

5. Poor consideration of corporate benefit issues for individual legal entities or groups of legal entities which participate in a given intercompany supply. This goes to the heart of corporate governance / subsidiary governance, and whether a purported arrangement is actually sustainable in reality.

N.B. We offer ‘toolkits’ of template ICAs to help multinational groups achieve legal substance in their Transfer Pricing compliance. Click here for details.

5 books worth reading this summer for Mothers in Business


Inspired by Bill Gates’ article “5 books worth reading this summer“, I thought hard and pulled together a list of 5 books worth reading for mothers in business. “Mother” alone is already a profession in its own right. “Mothers” and “business” together more sound like multi-tasking often leading to guilt and stress. These five books all share a common theme of finding peace in the chaos of being a mother while working for/running businesses. Some serious, some funny, some bold and some extremely soul comforting. Happy reading!
Traction, by Gino Wickman. Let’s start with something a bit businessy and serious! Nothing particularly new if you are a big business books reader. However this book has the ability to allow us to have a bird’s view on your business or your management team if you are holding a serious role in corporates. It stimulates you to think your company’s vision, core values and inspire into the WHOLE team to row the boat together in one direction. This book will make you work smarter rather than harder which is so important when we have multiple roles in life.
French Children Don’t Throw Food, by Pamela Druckerman. If, like me, you wonder how French mothers can still be sexy, chic and confident after having children (and you are a bit jealous), you will find some answers in this book. Whether you are a Chinese mother living in the UK like myself or an American mother living in Paris like the author Pamela, it’s all about finding your own way, what kind of parent you want to be, and what kind of relationships you want to have with your children – not just when they are young but also in their adulthood, as we reap later depending on what we sow now.
Conversations with God, by Neale Donald Walsch. Don’t be put off by the title if you are not a religious person. Give it a chance as it is the most inspiring and enlightening book I’ve ever read. “Enlightenment is understanding that there is no where to go, nothing to do, and nobody you have to be except exactly who you’re being right now.”
For Better, For Worse, by Damian and Siobhan Horner. This is a wonderful book for anyone who is feeling challenged by the messiness of marriage and the chaos of family life. It’s a true life account of a husband and wife – written in their own voices – who take a break from their working lives and take their two small children (one and two years old respectively) in a small boat through the canals of France, from North to South. I’m looking forward to re-reading this one.
In Love With the Mystery, by Ann Mortify. Unlike the other books on this list, this one is to be dipped into, and not necessarily read from cover to cover. It consists of short passages on life and spirituality. What is extraordinary about ‘In Love With the Mystery’ is the depth and beauty of the observations – perfect as a focus for evening reflection or morning mediation.

5 things people forget when it comes to Intercompany Agreements

In honour of LCN Legal’s imminent 5th anniversary, here’s a list of 5 things people often forget when it comes to putting in place the Intercompany Agreements (ICAs) which multinational groups need for Transfer Pricing compliance:

1. Intercompany agreements (ICAs) are essentially forward-looking: they are promises to act in a certain way in the future. Functional analysis for TP is essentially backward looking – it’s about who has done what over a certain period. That’s why ICAs are essential for defining the desired ongoing operation of the group, and not just recording it.

2. ICAs are not just about Transfer Pricing. They also affect matters such as customs duties, international funds flow, VAT, and enforceability of intellectual property.

3. The signature of ICAs should not be regarded as a ‘rubber stamping’ exercise. The signatories (officers) of each participating company need to consider the interests of that individual company, and not merely the interests of group.

4. ICAs are like software. They need to be updated and maintained regularly, otherwise they stop working.

5. An ICA is not much use unless you can find the signed copy when you need it. That’s why effective archiving and retrieval systems are essential.

N.B. We offer ‘toolkits’ of template ICAs to help multinational groups achieve legal substance in their Transfer Pricing compliance. Click here for details.

The 5 inspirational quotes I am living by….

We are living in a world full of inspirational stories with people who have achieved extraordinary things. In fact, we have always been. Those great people have no limitations on sharing their wisdom with us, the rest of the world. Nowadays, with social media so integrated in our life, it has never been easier for us to have access to or exposed to inspirational quotes. I don’t know about you, but I am a big fun of inspirational quotes. I just love the positive energies coming out my heart whenever I am reading them. It makes me feel connected with the people who said the quotes. It strengthens my belief on a daily basis that Life is beautiful and full of miracles. So today, I am sharing some of my all time favourite quotes I am gathering over the past couple of years which have become the light house of my daily life; the reminder of living my life with values and principles close to my heart; most importantly — living my life with integrity and making a difference in the lives of my children and the people we are associated with.

First thing first, this is the one most close to my heart. It is the constant reminder of the importance of self-acceptance, self-unconditional love. We have all been through the stages of letting ourselves down which leads to self-loath. We just need to constantly remind ourselves that everyone (literally everyone on this planet) is a product in progress.

This is the one which helped me change my paradigm towards life generally. There are always two sides to every story. Sometimes, we can be so stubborn that we are blind with other alternatives while we so focus on our own way of thinking. When you are open to other people’s way of thinking and perspectives, it is just like a light in a dark room and leading you to another door which you never know it is there before.

Well, I am sorry for the ‘F’ word. But it is so true and it is just what we needed majority of the time. We are so used to overwhelming ourselves with our inner fears and countless worries. And we are so allowing ourselves to accept all of the excuses dragging us down. The fun fact is that a lot of what weigh you down isn’t yours to carry. So stop worrying how it’s going to happen and start believing that it will. AND just F**** Do it! You will be amazed with the result and how much you expand.

OK, Let’s be honest with ourselves. We all have some people in our dark closet. If we are allowed legally and morally, we would like them to disappear — I mean literally disappearing in this planet. And then back to the reality, unfortunately, we can’t physically or magically make people disappear. But we can be proactive and control our own thoughts and emotions and decluttering those people out of our life. Make it a point to think intentionally and to be positive. Let go of the past by forgiving yourself and others. It does you no good to hold onto resentment, so forgive and forget and then bless those who you forgave.

Finally, 4 simple rules to have a fulfilling day, everyday. If we can leave the worries about our future to future, be peaceful of our past, focus on all of our energies and time on today, just today. Look for the good in others and try to see the best in all that you do by being accountable for your own actions. You will be amazed by how peaceful and happy you can be and how much you can make progress in the different areas of your life. After all, the Sky is the limit!

Consequences of lack of legal documentation of intercompany financial transactions

As you probably know, the OECD has recently released a non-consensus discussion draft on the Transfer Pricing treatment of financial transactions between associated enterprises, under the BEPS project. You can download the discussion draft here.
The types of arrangements considered include intra group loans, guarantees, hedging, cash pooling and captive insurance. As you would expect, the starting point for any TP analysis is to look at the written contractual terms (if there are any) in place between the group companies, and to assess whether those written terms are consistent with the actual conduct of the parties.
It’s probably fair to say many multinational groups pay less attention to the legal documentation of intra-group financing arrangements, than they do to intercompany agreements for other transactions. But it’s arguable that the consequences of a lack of legal documentation for financial transactions may be more severe, because there is potentially more uncertainty about the fundamental nature of the arrangement – was a payment intended to represent a loan or equity? Or some other form of contribution? What is the currency of the obligation? Ambiguity around these fundamental issues can seriously undermine the robustness of a group’s transfer pricing strategy, when subject to challenge from national tax administrations.
If you would like to take a step towards improving your Transfer Pricing compliance through intercompany agreements, you can get in touch by emailing us at info@lcnlegal.com or calling us on +44 20 3286 8868. We will be happy to help.

What's the relationship between Intercompany Agreements and Functional Analysis for TP?


 

This was one of the discussion points which came up at the seminar we co-hosted with the Thomson Reuters ONESOURCE team last month. The focus of the seminar was the practicalities of managing Intercompany Agreements for TP compliance.

Intercompany agreements (ICAs) don’t replace or override functional analysis. The two go hand in hand. On a typical client project, our first step is usually to review the draft TP reports (or master file and local files), which should include the who-does-what functional analysis. This helps us understand the intended position, so that we can then design the legal structure, including the ICAs.

But it’s not a one-way process; the ICAs and the functional analysis should inform each other. If the ICAs don’t match the operational activities, they are probably wrong. If the functional analysis and purported allocation of risk is not consistent with the actual legal relationship between the relevant group companies, it has no basis in fact.

If you would like to take a step towards improving your Transfer Pricing compliance through intercompany agreements, you can get in touch by emailing us at info@lcnlegal.com or calling us on +44 20 3286 8868. We will be happy to help.

 

"Bad and better"


 

If you want an antidote to gloom-and-doom reporting and the idea that global civilisation is in decline, you should read the book “Factfulness” by Hans Rosling, his son Ola Rosling and his daughter-in-law Anna Rosling Rönnlund. One of the book’s central messages is how outdated and inaccurate our view of the world is, on matters as fundamental as child mortality, access to education for girls, and life expectancy. Extraordinary improvements in the welfare of people across the world are rarely reported on, because they are less dramatic than emergencies and disasters.

Things can be both “bad” (such as the number of people living in extreme poverty) and remarkably “better” than they were before, even in recent decades. The graph above shows the incredible reduction in the mortality rates of children under age 5. (Source: free information from Gapminder.org).

“Bad and better” is probably a fair description of the state of compliance of most multinational groups as regards intercompany governance and transfer pricing compliance. Intercompany agreements are not a panacea, but they are a useful tool for creating clarity in the relationship between group companies, helping directors to understand their legal duties, and supporting transfer pricing compliance.

If you would like to take a step towards improving your Transfer Pricing compliance through intercompany agreements, you can get in touch by emailing us at info@lcnlegal.com or calling us on +44 20 3286 8868. We will be happy to help.

"Aggressive and Comprehensive"

If, like me, you’re a student of international corporate structures, you’ll like this interview with Edward Zeng. Edward is the Shanghai-based Senior Partner of HanSheng Law Offices, and the interview focusses on the “aggressive and comprehensive” approach of Customs officials in China, and the role of Intercompany Agreements in helping multinational groups to avoid fines and criminal sanctions.

Here’s the link:

Interview with Edward Zeng

For an overview of our services in relation to Intercompany Agreements for Transfer Pricing, Customs, VAT, Legal and Regulatory compliance, click here. If you would like to arrange a preliminary call with one of our specialists, email us at info@lcnlegal.com or call us on +44 20 3286 8868.

Webinar: Intercompany Agreements for Transfer Pricing compliance

I am delighted to confirm that Thomson Reuters’ will be hosting a webinar on Tuesday 19 June.

The focus of the webinar is Intercompany Agreements for Transfer Pricing compliance, and sharing market insights as to how multinational groups can ensure that their Intercompany Agreements meet the necessary requirements.

We are honoured to be the guest speakers at this event. We’ll be discussing the importance of Intercompany Agreements not only from a compliance perspective – but also the practical implications of not having adequate agreements in place and accessible. 

Here are the details:

Date: 19 June 2018

Time: 2:00 to 2:45 PM BST

Click here if you would like to reserve a place.

Please feel free to share this with anyone else you think would find it of interest.

 

Free Guide: Effective Intercompany Agreements for TP Compliance

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