In our experience, MNEs screw up their arrangements involving local sales entities more often than any other intercompany transaction type. We’re talking here from the perspective of legal implementation of TP policies.
Why does this matter?
Because the transaction will fail at Step 4 of the OECD steps for analysing risk and pricing transactions, since the intercompany agreements will be inconsistent with the parties’ actual conduct. The MNE will therefore have missed the opportunity to delineate the relevant transactions through its agreements. Its TP policies and TP documentation may describe a fact pattern which simply doesn’t exist in reality. Benchmarking will have no value if the benchmarked transaction is not comparable with the actual arrangements.
To help avoid MNEs avoid this kind of outcome, we’ve decided to hold a live workshop specifically for TP advisers, to talk through the legal implementation of transaction types involving local sales entities.
The workshop will be held on Wednesday 14th July at 9am Central Time / 10am Eastern Time / 3pm BST / 4pm CET.
We’ll use mini case studies to go through the following issues (time permitting):
- The main options for the legal structuring of local sales entities
- Typical contractual ‘levers’ to give effect to different risk allocations
- Ownership of marketing intangibles
- Pricing clauses for targeting operating margins
I’m secretly hoping we won’t get too many registrants – maybe it will be just you and me. I would prefer to have a conversation, rather than give a lecture. If you’d like to participate, you can register here.
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