Fundamentals of Transfer Pricing

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This course addresses the importance of transfer pricing, the legal framework and the practical application of the arm’s length principle by way of a value chain analysis, comparability analysis and use of the OECD transfer pricing methods. In addition, the taxation of the digital economy and transfer pricing adjustments are considered, along with transfer pricing documentation, transfer pricing risk management and dispute resolution and avoidance mechanisms. This course provides practical tools, roadmaps and step-by-step approaches.

Overview

Transfer pricing deserves to be a top-of-mind priority. The OECD, United Nations, European Union and numerous countries have changed and keep changing their guidance in the field of transfer pricing. Supply chains have been and are still under strain and continue to shift from long and lean to agile and resilient. Business models of multinational enterprises (MNEs) are changing and becoming digitized business models. In addition, first we had BEPS 1.0, and now we are dealing with BEPS 2.0 and its proposals with respect to Pillar One and Two. The aforementioned changes require a different approach from both tax authorities and MNEs. It is, among others, key that both MNEs and tax authorities can: (i) understand and apply the latest guidance in the field of transfer pricing; (ii) perform a granular risk and functional analysis; (iii) attain a good understanding of how value is created; and (iv) understand how one should deal with the three-tiered OECD approach related to transfer pricing documentation. 

With so many developments, there is an increased risk of controversy. For both MNEs and tax authorities, it is essential to know which dispute resolution mechanisms are in place and, if one were to enter a dispute, how to prepare oneself.

Topics Covered

  • Introduction to transfer pricing
  • Understanding the business and value chain
  • Comparability analysis
  • Transfer pricing methods
  • Compliance and documentation
  • Transfer pricing risk management and audits
  • Transfer pricing dispute resolution and avoiding double taxation
  • Regional challenges in transfer pricing

Learning Objectives

  • Define the importance of international transfer pricing to MNE groups and tax administrations
  • Assess a country’s legal framework for transfer pricing, taking into account international practice and guidance (including the OECD Transfer Pricing Guidelines) and the role of tax treaties
  • Determine the challenges raised by the digital economy and the Pillar One and Pillar Two proposals
  • Identify the different types of operating models of MNEs relevant for transfer pricing and apply a basic value chain analysis
  • Identify the comparability factors, apply a functional analysis and distinguish the steps to perform a comparables search
  • Identify the transfer pricing methods, assess the strengths and weaknesses of each method and define when and how to apply the transfer pricing methods
  • Define the purpose and content of transfer pricing documentation, including understanding international guidance on this subject
  • Identify the factors affecting transfer pricing risk and the role of transfer pricing risk management
  • Distinguish the various dispute resolution mechanisms, including advance pricing agreements, the mutual agreement procedure and arbitration

Delivery method

Online (QAS self-study). Consists of 8 modules of 1-hour video lessons each.  Also includes recommended and optional reading materials and assignments to help apply knowledge in practice.  Assessments are also included to test your overall understanding.

Field of study

Taxes

Course review

This course was last reviewed in June 2022

Who should participate

  • Tax lawyers from law firms and/or accounting firms
  • Tax/transfer pricing staff from law firms and/or accounting firms
  • Finance managers/controllers from MNEs
  • Tax inspectors from tax administrations, government officials, academics
  • Students

Prerequisites

The course is recommended for those with no or limited knowledge and experience with international transfer pricing. However, it is also suitable for those who have some experience with transfer pricing and wish to refresh or consolidate their understanding of the topic.

Study time

The online course is divided into eight modules, each consisting of the following components:

  • Videos: approx. 1 hour per module
  • Case assignments: 1-3 per module
  • Recommended reading materials per module

Access to the online course is granted for a period of 2 months, from the date of ordering.

Continuing Professional Education (CPE)

Kindly check with the respective accrediting organization to determine eligibility of CPE credits.

International Bureau of Fiscal Documentation (IBFD) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of CPE on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Issues regarding registered sponsors may be submitted to the National. Registry of CPE Sponsors through its website: www.nasbaregistry.org. Recommended NASBA CPE credits for this course is: 13

Please consult the FAQ for more information. Regarding administrative policies such as complaint, cancellation and refund, please refer to our Terms and Conditions or contact info@ibfd.org.