TPA Global’s Approach On Holistic Quantitative Value Chain Analysis And The Connection To The “Unified” Approach

January 24, 2020

Value Chain Analysis (“VCA”) has become a burning topic for discussion. It is of high importance, companies to understand how to conduct a Value chain analysis in order to support their transactions and define the value creation processes. Conducting a VCA analysis plays a vital role on supporting TP documentation, negotiation, communication to the board and other stakeholders.

We are all aware that there is a need for both qualitative and quantitative analysis, in order to identify the key allocation keys. In order to make this analysis more objective there are three (3) anchors that need to be followed:

•    Regulatory anchor-countries regulation requirements
•    Industry anchor- value drivers that have an economically significant impact on EBIT
•    BEPS-compliant anchor- BEPS criteria for a proper quantification of carve-outs and allocation to countries/ legal entities

In this regard, an industry-wide analysis needs to be performed in order to enhance the robustness of the outcome. This process adds an extra layer of objectivity to the quantification.
In addition to that, on 9th of October 2019 OECD released the Unified Approach. It proposed the “Unified” Approach under Pillar One, which is an important step forward towards an agreement among the member countries of the OECD in reaching a consensus solution for reforming the international tax framework. The determination of how the amount A is allocated is still vague and unclear (formulaic approach) but it seems

With this objective in mind, we invite you to an informative webinar where we will discuss the following:

•    Presentation of TPA Global’s holistic quantitative VCA analysis
•    Explanation with examples of the Industry-wide quantitative VCA
•    Explanation of the “Unified Approach”
•    Where does the “Unified Approach” lead to?

TPA Global

Diemerhof 42 - Tower 42
1112 XN Diemen