ICA for transfer pricing compliance

Who these workshops are for

Changes in the operations, corporate structure or economic conditions of a multinational group typically mean that its transfer pricing compliance policies need to be revised.

Any such changes must be implemented legally, including by updating the group’s intercompany agreements. This is a specialist task: few tax professionals know how to analyse or write legal agreements, and even fewer commercial lawyers have an understanding of transfer pricing. Without expert guidance, agreements may be implemented which make no sense in the context of the group’s legal structure, or which don’t match their TP compliance policies. Such discrepancies are an obvious point of focus for tax inspectors, and expose the group concerned to unnecessary risks of adverse transfer pricing adjustments, fines and penalties, and responding to lengthy tax investigations.

To help bridge this gap, we offer a package of 4 quick-start workshops, to facilitate a practical, achievable plan of action for the legal implementation of the required changes to intercompany agreements.

These workshops are specifically designed for multinational groups with an in-house legal team which has the capacity and resource to manage the detailed legal work themselves, but which lacks specialist understanding of the legal implementation of transfer pricing compliance.

How the workshops are structured

The workshops are facilitated as live video calls, facilitated by a senior member of the LCN Legal team. The workshops are are designed to help the group’s in-house project team plan and carry out the required work as efficiently as possible, and avoid common pitfalls (such as agreements with missing or inappropriate functionality for allocating risk).

Because intercompany structures need to work from a holistic, multi-disciplinary perspective, it is essential to have the right people in the (virtual) room, and to bring together representatives of the key in-house functions involved (e.g. tax, finance, legal, compliance and risk).

The workshops generally follow the plan set out below. However, they can be adapted to suit the needs of the specific project as it evolves.

Workshop 1: Scoping (online, 50 minutes)

• High level review of the group’s existing TP policies and identification of the changes that may be needed from a TP, governance and operational perspective
• High level review of the key transaction types involved from a legal perspective, the accounting treatment of relevant transactions and the legal entities affected
• Identify other stakeholders both within and outside the group that need to be consulted
• Identify additional information and documentation needed
• Agree the specific actions which the group’s internal team needs to complete before the next workshop

Workshop 2: Review of current status (online, 50 minutes)

• Review of analysis of existing legal structure, the current TP documentation and any existing intercompany agreements in place
• Detailed review of extent of changes needed, or whether the existing agreements already provide sufficient flexibility (e.g. in definitions of ‘cost’ or scope of services)
• Consideration of the components for an outline transition plan for getting from current status (A) to TP compliant (B)
• Agree the specific actions which the group’s internal team needs to complete before the next workshop

Workshop 3: Review of proposed revised legal structure / intercompany agreements (online, 50 minutes)

• Detailed review of revised agreements / amended agreements
• Detailed review of a draft legal documents and actions list for implementation (including briefing notes for the directors of all supplier and recipient entities)
• Confirmation of additional input required from other stakeholders
• Agree the specific actions which the group’s internal team needs to complete before the next workshop

Workshop 4: Pre-implementation review (online, 50 minutes)

• Review of progress against the transition plan
• Discussion of any issues or blockages which have arisen
• Confirmation of the specific outstanding actions needed to complete the transition, including archiving copies of executed documents and retention of defence files
• Consideration of the processes needed for the ongoing review and maintenance of transfer pricing agreements and related arrangements

Price for the package of 4 workshops

GBP 4,680 plus VAT (if applicable) (includes up to one hour’s preparation time spent by the LCN facilitator before each workshop).

A discount of 30% is available on the standard price of subscription to our toolkit of template intercompany agreements (usual price GBP 4,050 plus VAT (if applicable)), if it appears that the toolkit would be helpful to you.

Additional support is available if needed

Additional support is available for groups with more complex supply chain, intellectual property ownership or group structures, or those wanting more hands-on assistance for their project. For example, our Virtual Legal Director Service gives a group dedicated access to one of our senior lawyers for the equivalent of 1 day per week (or for however many hours per week or month may be appropriate).