Fundamentals of Transfer Pricing
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.
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.
Introduction to transfer pricing
- Importance of transfer pricing to MNEs and tax authorities
- Policy framework and legal basis
- Explaining the tax challenges of digitalization of the economy: live examples
Understanding the business and value chain
- Roadmap for a basic value chain analysis
- Understanding different business models
- Sectoral approach to the value chain
Comparability analysis
- Basic elements of comparability
- Search process and criteria
- Impact of COVID-19
Transfer pricing methods
- Explaining the economics of pricing and profits and basic accounting terminology
- CUP, RPM, CPM and TNMM and when to apply each of them
- Use of profit split method
Compliance and documentation
- Purpose and contents of transfer pricing documentation
- Compliance issues and best practices
- Examples of country practices
Transfer pricing risk management and audits
- Transfer pricing risk and audit management – The MNE perspective
- How to assess TP risk – Ratio analysis and other approaches
- Transfer pricing audit and controversy cycle
Transfer pricing dispute resolution and avoiding double taxation
- Domestic dispute resolution
- International dispute resolution
- Dispute prevention (advance pricing agreements and safe harbours) and cooperative compliance
Regional challenges in transfer pricing
- Regional trends in transfer pricing and sectoral focus
- 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
- Anuschka Bakker, IBFD, The Netherlands
- Brenda Engelbrecht, Aspen Pharmacare Holdings Ltd, South Africa
- Edvard Rinck, Ernst and Young Tax Services Ltd, Hong Kong
- Emmanuel Llinares, NERA, France
- Geoff Morris, Independent Transfer Pricing, Australia
- Istina Delivan, KPMG, UAE
- Jeroen Kuppens, KPMG Meijburg & Co, The Netherlands
- Martin Lagarden, Henkel, Germany
- Melisa Gomez, BaseFirma, Argentina
- Philip de Homont, NERA, Germany
- Sharvari Kale, IBFD, The Netherlands
- Sven Bremer, Siemens, Germany
- Tatiana Machovcova, Henkel, Slovakia
- Thomas Hoppe, Siemens, Germany
- Varun Giri, IBM, USA
- Vikram Chand, University of Lausanne, Switzerland
- Zachary Somers, IBFD, The Netherlands
- 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
This course may also be considered essential for individuals preparing for CIOT ADIT Module 1 – Principles of International Taxation and Module 3.03 - Transfer Pricing option. It may also benefit individuals preparing for CIOT ADIT Module 2.10 – United States option, though this course is not specifically designed for the ADIT. More information about this qualification can be found on the CIOT ADIT website.
This 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.
No advance preparation is necessary. All required study material is provided within the online training.
Access to the online course is granted for a period of 2 months, from the date of ordering or the indicated start date.
Mandatory course activities: 14 hours 54 min
All mandatory course activities can be completed within the access period by dedicating approx. 1hour 45 min of study per week. Please note that study materials included in the course or certificate programme will be accessible for the duration of the access period only. Non-mandatory supplementary material is also provided in this course.
We recommend you check with your respective accrediting organizations to determine the eligibility of CPE credits for this course.
International Bureau of Fiscal Documentation (IBFD) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have 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: 19
See our FAQ section for more information. Regarding administrative policies such as complaint, cancellation or refund, please refer to our Terms and Conditions or contact us at info@ibfd.org.
Field of study: Taxes
Delivery format: Online - QAS Self Study
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.
Course level: Introductory (basic)
This course was last reviewed in July 2024
Please note that the content of this online course is subject to change based on updates in industry standards, regulatory requirements, and other developments. We strive to provide the most accurate and current information; however, we recommend verifying any critical details independently.
Group Participation
If you are an enterprise and would like to register a group of more than 5 participants from your company, please email us at info@ibfd.org for more details.
