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Taking the lead

Case Study

We were instructed on this ICA project by a company that provides services in the fitness sector. It has a broad, global consumer base and is part of a large multinational group with a complicated corporate structure. As is very often the case, we were recommended to the client by their US tax advisers.

As always, the first task in this matter was to scope out the intra-group supply flows, so as to fully understand the value chain analysis and the way in which the group companies interacted with each other.  Due to the particular complexities of this organisation, in terms of service supplies, intercompany loan arrangements and intellectual property ownership, this process was both fascinating and challenging.

In particular, it was necessary to reconcile the differences between the transfer pricing analysis of related party transactions, and the legal relationships involved. For example, the economic view of intellectual  property ownership is not always the same when considered from a legal perspective, but a clear understanding of how the title to intellectual property is held within a group is pivotal to correct legal implementation of the group transfer pricing policy.

Our review resulted in the identification of eleven key transactions types. The next step was to draft bespoke intercompany agreements to document these supplies and to create a suite of standardised templates for future use.

From the client’s perspective, our value add comes from our ability to bring clarity to the complex issues involved and to take a collaborative, common sense approach. Our now deep understanding of the group has already led to us being asked to advise on several other sizeable projects.

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