TPA Global’s Approach On Transactional Quantitative And Holistic Quantitative Value Chain Analysis

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 in a qualitative analysis, four (4) different techniques are used. These techniques are: Pie charts, Porter’s style visualization, Process contribution analysis/Balanced score cards and Canvas. After a qualitative method, there is the need of a quantitative VCA.

A quantitative analysis allocates a portion of EBIT on a responsibility profile (i.e. investment, profit, revenue or cost centre) and the relevant carve-out method. Each entity from a multinational enterprise (“MNE”) is allocated a portion of EBIT based on the relevant allocation keys. Quantitative VCA is presented as a corroborative method for transactional transfer pricing.

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 your 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.

Thus, a combined qualitative and quantitative VCA constitutes an important tool, which can provide a holistic economic view on the activities of the MNE group and further, analyse and align the operating model.

Key Highlights

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

  • Presentation of Transactional quantitative VCA analysis, focusing on the price/profit level.
  • Presentation of TPA’s Global holistic quantitative VCA analysis, discussing every step of the of the process
  • Extended explanation with examples of the Simple and the Complex quantitative VCA
  • A detailed explanation of an industry-wide approach, in order to identify the key profit drivers of an industry.
  • Examples of some of the industry-wide analysis
Speaker
Wednesday, 22 January, 2020

9:00 AM – 10:00 AM Mexico, USA and Canada
12:00 AM – 1:00 PM Brazil (BRT)
3:00 PM – 4:00 PM London (GMT)
4:00 PM – 5:00 PM Amsterdam (CET)
6:00 PM – 7:00 PM Moscow (MSK)

Date

Jan 22 2020

Time

CET
4:00 am - 5:00 pm

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