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Reprising LCN’s greatest hits in Austin, Texas

Intercompany Agreements

12 November 2023

A report from our workshop at the Praxity North American International Tax Conference

Last week my colleague Leiza Bladd-Symms and I were in Austin, Texas, which is apparently the 'Live Music Capital of the World'. We had been invited to present a workshop as part of the 'TP Bootcamp' at the North American International Tax Conference, which was attended by over 500 delegates.

It was a lively and enjoyable event, and we're very grateful to Ulisses Meneses Ortiz for hosting the workshop and co-presenting with us. We gave attendees a thorough introduction to the central role of intercompany agreements in TP compliance, and some common errors. And it gave us a chance to reprise some key themes which longstanding readers of this newletter will be familiar with.

'Crazy (If You Think ICA's Can Be Implemented After The Fact)' is always popular. As are 'That Don't Impress Me Much (You Can't Create An ICA By Just Copying A Third Party Agreement)' and 'I Walk The Line (That Demonstrates Both A Legal And Commercial Rationale)'. We also took the opportunity to run through some recent cases that provide important lessons for multinationals and their advisers, such as Coca-Cola, Aspro, BlackRock and Skechers.

Often at such events, as well as sharing our knowledge and perspectives we also gain some new insights ourselves, and this was no exception. I was particularly struck by hearing about instances where tax inspectors had identified patents held by local entities, and had objected to those entities being remunerated for ‘routine functions’ only. This clearly shows the need for TP policies to reflect changes in the roles of entities over time as well as the legal ownership of intangibles, and to update their agreements accordingly.

As I hope you already know, we pride ourselves on being active members of the international tax and transfer pricing community, and we're always happy to share our expertise. So if you'd like to organise a workshop for your organisation, or one you advise, just let me know.

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Article by
Paul Sutton
LCN Legal Co-Founder

Free Guide: Effective Intercompany Agreements for TP Compliance