FY 2020 Transfer Pricing Documentation- how to deal with the Covid-19 impact?

November 5, 2020by TPA Global1
Covid-19impactWebinar
Main takeaways

6. Optimize your tax impact of your TP system:
Risk (cost) allocation to limited risk entities;
Reconsideration on current APAs;
Revision on financial arrangements,
Transfer of IP

7. Perform benchmark studies that reflect the Covid-19 impact, by possibly
accepting loss-making comparable;
applying cost plus zero on limited risk entities; and
using comparable data properly.

8. At all times, keep your economic reality (conduct of parties) synchronized with the functional & contractual realities.

6. Optimize your tax impact of your TP system:
Risk (cost) allocation to limited risk entities;
Reconsideration on current APAs;
Revision on financial arrangements,
Transfer of IP

7. Perform benchmark studies that reflect the Covid-19 impact, by possibly
accepting loss-making comparable;
applying cost plus zero on limited risk entities; and
using comparable data properly.

8. At all times, keep your economic reality (conduct of parties) synchronized with the functional & contractual realities.

6. Optimize your tax impact of your TP system:
Risk (cost) allocation to limited risk entities;
Reconsideration on current APAs;
Revision on financial arrangements,
Transfer of IP

7. Perform benchmark studies that reflect the Covid-19 impact, by possibly
accepting loss-making comparable;
applying cost plus zero on limited risk entities; and
using comparable data properly.

8. At all times, keep your economic reality (conduct of parties) synchronized with the functional & contractual realities.

1. Perform a Sensitivity analysis on business before/after COVID.

2. For external factors, find enough evidence in public domain.


3. Create a minimum Audit Trail for change of busines models:

Industry and Sensitivity analysis;
Impact on Business Model Footprint;
Changes in FTEs functionally & Geographical footprint;
Loan and Investor Documents, etc.


4. Create a minimum Audit Trail for change of TP system:
Industry sensitivity analysis;
Applying a holistic approach to group’s value chain;
Modified footprint on Treasury activities.


5. Create a minimum Audit Trail for change of benchmark used:
Financial analysis before and after COVID;
Business sensitivity analysis, including change in governance structure;
Volume impact and differences in cost structure;
Cost of capital to capture the impact of increased risks.

1. Perform a Sensitivity analysis on business before/after COVID.

2. For external factors, find enough evidence in public domain.


3. Create a minimum Audit Trail for change of busines models:

Industry and Sensitivity analysis;
Impact on Business Model Footprint;
Changes in FTEs functionally & Geographical footprint;
Loan and Investor Documents, etc.


4. Create a minimum Audit Trail for change of TP system:
Industry sensitivity analysis;
Applying a holistic approach to group’s value chain;
Modified footprint on Treasury activities.


5. Create a minimum Audit Trail for change of benchmark used:
Financial analysis before and after COVID;
Business sensitivity analysis, including change in governance structure;
Volume impact and differences in cost structure;
Cost of capital to capture the impact of increased risks.

1. Perform a Sensitivity analysis on business before/after COVID.

2. For external factors, find enough evidence in public domain.


3. Create a minimum Audit Trail for change of busines models:

Industry and Sensitivity analysis;
Impact on Business Model Footprint;
Changes in FTEs functionally & Geographical footprint;
Loan and Investor Documents, etc.


4. Create a minimum Audit Trail for change of TP system:
Industry sensitivity analysis;
Applying a holistic approach to group’s value chain;
Modified footprint on Treasury activities.


5. Create a minimum Audit Trail for change of benchmark used:
Financial analysis before and after COVID;
Business sensitivity analysis, including change in governance structure;
Volume impact and differences in cost structure;
Cost of capital to capture the impact of increased risks.

Health warning:

The timing is critical-if and insofar adjustments on your transfer pricing system and benchmark used need to be made in the FY 2020

–Implementation of adjustments are required in November/ December 2020

Health warning:

The timing is critical-if and insofar adjustments on your transfer pricing system and benchmark used need to be made in the FY 2020

–Implementation of adjustments are required in November/ December 2020

Health warning:

The timing is critical-if and insofar adjustments on your transfer pricing system and benchmark used need to be made in the FY 2020

–Implementation of adjustments are required in November/ December 2020

https://www.tpa-global.com/wp-content/uploads/slider13/Covid-19impactWebinar.jpeg

Put your COVID-19 adjustments for Transfer Pricing in your books for November and December 2020.

Yesterday, TPA Global ran its COVID-10 Transfer Pricing adjustment webinar with almost 100 attendees. Practical tips and quantitative examples were presented in how to work your adjustments in this year’s books. See the above chart for major takeaways. The taped version of this event is available upon request.

Contents of the Webinar 

Due to the outbreak of the Coronavirus, governments have developed and published measures to support individuals and enterprises through this period of disruption. TPA Global is currently working on our clients FY 2020 TP documentation in which for various industries the COVID 19 impact is material. During this webinar, TPA Global will present cases it is working on using the following steps:

What would third parties do?
– Measuring Covid-19 impacts (sensitivity analysis)
– Change of business model
– Change of transfer pricing system
– Change of benchmark used

When taking these steps, TPA Global will be presenting the minimum audit trail tax authorities will expect. Mostly external factors will drive changes in the business model, for which cases enough evidence would be available in the public domain. Without a business model change, a modification of transfer pricing system and benchmarking used will require a relatively heavy and technical audit trail.

The timing of this webinar for multinationals with a calendar year as book year is critical-if and insofar adjustments on your transfer pricing system and benchmark used need to be made in the FY 2020. Some companies might even consider to apply material modifications effectively from 1 January 2020 onwards. TPA Global will provide a check list on implementing Covid-19 triggered measures on your transfer pricing documentation.

Speakers
– Steef Huibregtse, CEO, TPA Global, The Netherlands
– Maria Grigoryeva, Global Head of Sales, TPA Global, The Netherland
– Federico Vincenti, Valente Associati GEB Partners
– Yariv Ben Dov, TPA Global Member

TPA Global

Transforming the World of Tax

One comment

  • Danielle Vardi

    November 6, 2020 at 9:28 am

    Very interesting, thank you. How can I get a recording of the webinar?

Comments are closed.

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