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The LCN Interview: Borys Ulanenko


Intercompany Agreements

21 February 2022


Borys Ulanenko is a transfer pricing professional, currently working in Krakow as part of Royal Dutch Shell’s in-house team. He also runs StarTax Education, a company he created that provides high-quality and affordable educational materials for people who are studying TP.

How did you get into transfer pricing in the first place?

It was mainly accidental. I was finishing my studies at university, a Masters degree in Economics. There were several options which I could consider. At that time – 2011, 2012 – most of the people in my university wanted either to go into investment banking or, second-best, join a Big Three management consultant. And then if you didn't succeed in any of those, you would go to the Big Four.

But I didn't really like IB or management consulting. I felt it's a bit too much corporate work: you need to trade all your life for this type of career. I also was somewhat interested in law, and I was watching a TV series called ‘Suits’, about lawyers, so I was feeling a bit of a ‘law vibe’. And then I thought, ‘Tax seems to be the overlap of my main education, economics: there are a lot of economists in tax, and one of the main tax areas that economists work in is transfer pricing.’

And then I've seen this opening in KPMG in Ukraine, an intern position in transfer pricing. I didn't really know much about transfer pricing back then. And then I was like, ‘OK, I can try it and see where it goes.’ I applied, and fortunately they didn't ask any transfer pricing questions. (Ukraine had no TP rules back then: they were just discussing if there will be rules or not, and the legislative process, so I couldn't even Google much).


How would you describe the balance between the economic perspective on transfer pricing and the legal perspective?

I think transfer pricing is primarily economics. However, it's economics which is simplified and bounded by law. So when you think about transfer pricing and how to solve a transfer pricing problem or what to advise, you think primarily: what makes sense from economics perspective? It's mainly microeconomics, because it's the firms’ behaviours.

And then as soon as you have an idea of how firms would act in an uncontrolled environment as third parties, you need to think how that would work from the law perspective. How this economic model which you have in mind will translate into legal language. And I often find situations where there is a conflict, because transfer pricing regulations require you to simplify reality. They require you to use a very prescribed set of methods. There is some flexibility, obviously, but you always have to simplify something. If you read a TP policy, or TP documentation, or an intercompany agreement, it's always a simplification of reality.

Third parties may have a much more complicated relationship. They may have very specific terms in their agreements. While if you look at transfer pricing in an intercompany situation, you always know that both parties are not independent, so you just try to model the situation. And this model is always a simplified version of what it would be if they were third parties.


You’re currently a transfer pricing advisor in Royal Dutch Shell’s in-house team?

Yes, I'm taking care of some of the downstream Shell businesses, advising the business on how to structure transfer pricing, transfer pricing strategies, testing, etc.


What are the main types of problems that you have to solve working in-house, in terms of getting other people in the organisation to work with you and understand what you do?

Shell is one of the biggest corporations in the world. As a result, it's quite challenging to get things done if you want to do something impactful quickly. Shell operates in almost every country in the world. So just co-ordinating all that… the change management and project management aspect of our job is very difficult.

It's true in every organisation which is comparable in size. The main thing that we need to do is co-ordination and education. We need to educate our stakeholders about what transfer pricing is, why it is important, and when they need to contact the transfer pricing team and ask for our advice or ask for confirmation. That's more of an educational part.

And then there is a process part, where we want to not just build this awareness, but also build a process around it. Who does what, and when, and why? And I think probably 60% or 70% of the time that we spend is on organisational aspects like that. Just because of the size.


Do you find it hard to get different functions to share insights and information?

It's quite difficult. The easiest part is where there is a business change, or a specific project, which is on the agenda for the whole organisation. Then it's easier to get people speaking to each other, sharing their knowledge, building cross-functional teams, because there is a very big pressure from the leadership to do this. Everyone knows that this project is their top priority, and they need to ensure that all elements of the project work together well.

For more day-to-day things, it's much more difficult because it’s almost never the case that even 60% of a project team will be in the same country. You have people in different countries reporting to different lines and having different priorities.

The answer to this – it’s what I'm passionate about recently – is all about documentation, knowledge management and knowledge transfer. That's what every organisation needs to think about. It needs to have a very good plan in place, and very good systems that will capture corporate knowledge, spread it, and make it accessible to everyone. I find it so useful when I work with a team which has good documentation in place about their processes, about their work, what they do, how they do it, what are their experiences of projects they were working on. Documentation is everything now, especially with remote working.

Intercompany agreements are such a crucial thing in the transfer pricing world, which is often overlooked. I saw this while working in several organisations, and as a consultant as well. It's almost always a problem, because either no one knows where the agreement is, or you have a copy which is not signed, or just the agreement doesn't have all the critical elements which you need. Because from the commercial perspective, the business perspective, people don't care that much about intercompany agreements. But it's the transfer pricing team’s job to ensure that the organisation knows that intercompany company agreements are important. (And the legal team as well, of course.) And indeed, documentation and record storage for intercompany agreements is something which every organisation has to ensure.


You've worked at Big Four and in-house: what are the main differences?

It’s very different from a professional perspective, and from the culture perspective as well. From a career perspective, the main ideology of the Big Four is ‘up or out’. You always need to think about your next career option, about what you need to do to get to the next position, how to build your skills, how to demonstrate to the company that you’re worth your next role, etc.

I think that probably things have changed since I was in a Big Four firm: it’s now a softer environment, which is not so aggressive. But when I was there, our partner was saying that everyone must want to be promoted. So that's completely different from the in-house environment, where the company wants you to develop, of course, but the career opportunities are always more limited, even in big companies.

Also in the Big Four you can create business: you can bring new clients on board, and you're creating revenue and profit. Whereas the ideal in-house specialist, in my mind, is someone who builds the processes and systems which make his role unnecessary. That's a completely opposite logic.

The types of problems you are solving are different too. In consulting, generally you have a lot of different clients. I wasn't focusing on particular types of businesses or transactions. I know some people are more specialised in particular types of transactions or industries, but generally you tend to work with a lot of different clients, and you have this exposure to a big set of problems.

However, at the same time you don't have much of an opportunity to go deep and to improve companies’ processes. You don't think from this perspective.

In-house, you're working with a more limited set of problems, but you have an opportunity to look much deeper into them. And you can look at this not only from a TP perspective – what method to set and which price to set – but you also think about how this affects the whole business. What are the standards we should develop? If we are looking at compliance, how do we automate things? How do we make preparation of documentation easier? How do we eliminate manual mistakes? And because you work with the same scope every year – more-or-less – you have the opportunity to build processes and improve them. And that's what I find fascinating.


Doesn’t the ‘up or out’ approach carry a high risk of the Peter Principle applying: everyone is promoted to the point at which they become incompetent?

This can happen sometimes, and the culture does not have good safeguards to prevent it. Although I know it has changed since then. Also it’s not the same everywhere. There are various countries with different teams and some much healthier environments.


What does StarTax Education offer?

We provide transfer pricing courses and transfer pricing materials. There is a textbook which I wrote and there is a big online course. It's primarily for preparation for the Advanced Diploma in International Taxation exam. But it's also used by tax professionals who want to move to transfer pricing, or people who are just interested in transfer pricing and want to know more.


How did it start: what gave you the initial idea?

It was an interesting journey. I was doing the Advanced Diploma in International Taxation exam myself. Shell was sponsoring our preparation – they are very supportive of people developing their technical skills. They signed up to one of the service providers which provides courses on transfer pricing. It was ridiculously expensive, and it was not good at all: neither the materials which they provided nor the lectures. I just didn't like it.

I was working in transfer pricing, so it was not a problem for me to pass this exam even with weak resources. My next thought was: ‘I think I can teach people much better, and I can explain transfer pricing in simpler terms.’ Also, I was taking a lot of courses myself, in various things. I was taking online courses on philosophy, on how to code in Python, social media marketing, all types of courses. In those courses, it's much more competitive marketplace. And if you look at the quality of those courses, and the affordability, they are much better.

I was sure there is a demand for it. Because there are probably 500 people per year passing this exam, and not everyone is coming with a good TP background. So they need better resources. When I was analysing the market, there were lectures which were mainly live with a very limited set of materials, which cost three times what I was planning to charge. And there were one or two courses where there were only lectures without any materials and case studies, and the price was more or less the same as I was planning to charge. So I thought, ‘If I combine all that, bring a bit of innovation from other areas, make it good in terms of user experience, make a good site, it will work’. And it does.


What exactly makes StarTax Education better?

It explains transfer pricing in simple words to someone who doesn’t have a tax or transfer pricing background. It goes from really basic ideas to much more advanced topics.

The course is comprised of two major blocks. The first one is online lectures, which are pre-recorded. That was the first innovation. (After the pandemic hit, other course providers started doing this, but I was one of the first in transfer pricing.) So you can access the lectures and do them whenever you want. Most of the other course providers back then were either face-to-face lectures or live online lectures.

I made them much more visual. There are animations, graphs, all of that stuff. I’ve seen this in other courses on other topics, and I saw that we need this level of standard for transfer pricing as well. It will make it much easier.

And then I also made a lot of case studies and real-life practical problems. The lectures are split into modules, and after people finish a module, they solve a practical problem. These are in the same format that the exam would ask you to solve. They send their solution, and they get detailed feedback on it within 24 hours.

The second block is a textbook. (I still don’t find a comparable transfer pricing textbook on the market. There are some good transfer pricing books, but they are usually targeting people who already know transfer pricing and want more specialised knowledge.) Again the textbook is from the basics to more advanced concepts. So if you read it all without doing the rest of the course, you kind of know transfer pricing. I’m not sure you can solve difficult real-life transfer pricing problems, but you can speak the same language as a transfer pricing specialist.


How long did you spend preparing it?

I spent around seven months, out of which the hard work – about two or three hours every day – was around four months. 70% or 80% of the time was on writing the textbook. Writing the book was ridiculously difficult, which I didn't realise at the start. (I think everyone who tries to write a book for the first time faces this!) And then the rest of the time was spent recording the lectures, making slides, etc. I wrote the textbook first, and I had to do all of the research, analysis, background, preparing materials and writing about them. So making the lecture slides based on that was relatively easy.

It went live in October 2020.


Has it grown since the start?

Yeah, it's grown quite quickly. I now have students from, I think, 15 countries. I also sell the textbook separately, and I think people from 50 countries bought the book. I don't recall the particular number of copies, but it's definitely more than 100.

And the interesting thing is that I decided I'll do that all myself. So I didn't work with publishers, I didn't work with any agencies. Also when it comes to the course, production, website production, digital marketing… everything I did myself (my wife helped me with the recordings and quizzes). Probably if I would hire professionals for every stage of this, it will be more expensive, but it will be better done. But I thought, ‘Well, it's my first real business experience. I'll do everything myself just to understand how this all works.’ And it was a very rewarding journey. The benefit which I received, it's not really about money for me, even though it's quite successful. It's more about experience, business experience. So now I feel much more comfortable about starting my own business if I ever decide to.


Have you had any mentors who have shaped your career?

Yes, several. My first manager at KPMG, Konstantin Karpushin, built the transfer pricing practice from scratch there. He was an extremely business-oriented person. I really learned a lot from him about talking to clients, and challenging yourself with very difficult tasks.

The second person I would mention is Maja Pawlowska-Dziedzic. She's still my line manager – now more my ‘dotted line’ manager, I would say. She is Head of Transfer Pricing in Shell’s Krakow office, and effectively manages approximately half of the transfer pricing in Shell. She really helped me to understand how Shell works, how the corporate world works, and all of the organisational aspects of it. And she was also a good friend and support, always.


Looking back on your career so far, what achievement are you most proud of?

I think StarTax Education. There were a lot of good things I did in my day-to-day job, and a lot of exciting stuff, but StarTax Education was at a different level.


What would be your ideal job if you weren't in transfer pricing?

I'm passionate about science, and cognitive sciences particularly. I wouldn't want to be a research guy, who looks at people's brains. But I find it very interesting. So probably someone who was designing and running behavioral experiments.


What are your hobbies?

I'm doing hiking and trekking when I have time. My most interesting trip was to Alps, where I climbed Mont Blanc successfully.


How would you describe yourself in three words?

People say – well, at least my mom and my mother-in-law say – I'm very organised. Then I would say probably ‘creative’ and at the same time ‘introverted’.


Who would you invite to your dream dinner party?

It’s probably quite cliché, but Barack Obama. Also Elon Musk. He seems to be a difficult person to speak to, at least from his interviews. What I will try to do with him is just to explain to him what I'm doing in my career, and what we do in terms of transfer pricing overall, and then ask him how we should do that differently. Because I think he would probably bring a completely different perspective and he would give us ideas to revolutionise transfer pricing.


What advice would you give your younger self?

Apart from ‘buy bitcoin’, right?

It's a good question, because I think people are thinking about that all the time. You know, I'm quite happy with my life, and that's why I'm afraid that whatever advice I would give, I could make things worse. I think I would probably try to move my career a bit more to the technology side. I'm really passionate about AI, and how we can use it in everyday applications. But other than that, no, I'm afraid of breaking what I have.

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Article by
Paul O’Regan

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