Misalignment between a multinational group’s intercompany agreements and its transfer pricing policies are an obvious point of challenge for tax administrations.
If a group’s transfer pricing policies make statements which are not supported by their intercompany agreements, then the group is likely to be exposed to significant risks. The time and money spent by the group on transfer pricing advice and documentation may be wasted, and the group may be subject to substantial costs in terms of adverse tax assessments, fines, penalties and disputes
As shown by recent transfer pricing cases such as Coca-Cola and BlackRock, taxpayers should not assume that they can ‘disavow’ their own intercompany agreements after the event if they are incorrect, or supplement their terms if they are incomplete.
This tool from LCN Legal helps multinational groups and their advisers to head off these potential problems by reviewing their agreements in a structured and systematic way.
The output is in the form of an easy-to-read, colour-coded report, which covers the four key areas of alignment between agreements and TP policies.
It highlights areas and issues which may require further attention, so that corrective action can be taken now – and minimise the risk of TP challenges and adverse TP assessments in the future.
LCN Legal are global specialists in legal structures for multinational groups. we work with clients and advisers globally.
Since its establishment in 2013, LCN Legal has helped MNEs with combined annual revenues of over USD 130 billion to avoid unnecessary fines, penalties and adverse transfer pricing adjustments, by making sure that their legal structures are aligned with their transfer pricing policies and support their commercial needs.