USA - ASIA- MIDDLE EAST - NEW YORK - MIAMI - LA - HONG KONG - DUBAI - INDONESIA - MALAYSIA - EUROPEAN UNION - SINGAPORE - BEIJING
for Transfer Pricing
I. COURSE DESCRIPTION
has been taught by Kithsri DeSilva of the New Zealand Revenue,
and formerly a transfer pricing expert for developing jurisdictions
the Commonwealth Revenue Authority, with assistance by other
countries’ Revenue officials, this course covers practical
international transfer pricing issues faced by multinational
groups and revenue departments.
The course examines transfer pricing regulations
from the perspective of the OECD Guidelines and The US Regs
pursuant to IRC Section 482.
The main concentration of the course concerns identifying
comparables for the determination of arms length pricing.
Other issues covered include using cost-plus and
resale minus, developing cost sharing and profit split arrangements,
contract manufacturing, transfer pricing compliance and
record keeping, internal policy development, Revenue audit
techniques, and advance pricing agreements.
This course consists of 14 modules which
introduces you to the principles of Transfer pricing (TP)
as propounded by the OECD and practiced by many of its member
states. Transfer pricing is simple conceptually and yet
complex in practice. It is neither a science nor an art.
Those of us who have had the unfortunate task of establishing
or attacking a transfer price have often felt like blind
men in a darkroom searching for a black cat that is not
there. That may be the reason why very few TP cases reach
the courts. Most of them are settled outside.
This course has been organised on the
basis that the student has had no earlier exposure to the
subject. The course is intended to lay the groundwork on
which you can build on if you intend working in this area.
of you who are already familiar with transfer pricing may
find the introductory module useful for purposes of revision.
There is a vast amount of literature and
invariably differing opinions on the subject.
An important aspect this course is to acquaint you
with the databases, which contain this information.
the end of this semester, you should have become proficient
in researching these databases. I will be guiding you through
the material available in them. You will be expected to
read the documents identified in the modules. In particular
you will be expected to study “the
Transfer Pricing Guidelines for Multinational Enterprises
and tax administrations published by the OECD” and:
“U.S. International Transfer Pricing” Second Edition
by Lowell, Burge & Briger. Both
these documents are found at RIA checkpoint. You will also
have to read “International
Transfer Pricing -OECD Guidelines” by Hammer,
Lowell, Burge & Levey. found in the westlaw (database
ID “wgl-itpoecd”). You will have to read selected
articles from the journal “Tax
notes International” published by CCH. This too
is found on line at RIA Checkpoint.
This course introduces you to the TP laws
of USA the leader in the field of TP legislation. For your
dissertation, you are expected to research the TP legislation
of another country that has enacted TP regulations and present
a paper on it.
In 1995, Kithsri DeSilva was first a student of this program
and since 1998 has been teaching in program. He is
full time with the New Zealand Revenue Department.
An LLM executive level course.
This course will be taught at the executive level
and will employ case studies as well as global case analysis.
This course will involve fourteen weekly modules
that are delivered through on-line instruction pursuant
to current program specifications.
Each module will contain text material, study guide
instruction, and weekly interactive participation.
Text material may contain a combination of code sections
from various systems, cases, and commentary materials.
Study guides will contain commentary materials upon
the text materials with imbedded exercises and assignments
to be completed either independently or within a group of
two to five persons.
Assignments may be submitted directly to the Instructor
or submitted to the classroom.
Each module, selected students may be called upon to deliver
answers in the Internet based classroom to questions posed
by the instructor.
Questions may be posed in case study form or in issue
may be short (one page) form or long form (five page analysis).
During the semester, module based audio and videotape lecture
construction will be explored as well as the provision to
students through streaming technology.
During the sixteen-week semester, the students will
have two technology skills and control weeks.
The first week of the course, the student will spend
the time acquiring and testing the necessary accessing components
of the course, including: blackboard skills, database access,
proxy server access, material download, and other technical
students will introduce themselves and identify with each
other (camaraderie and network building).
During the third week, students will be given another
breather week to check the quality of their acquired technology
technical skills and offsite database access in order to
identify any problem areas that require immediate correcting.
During the semester, each student will receive at
least two detailed feedback sessions from the Instructor
through the detailed marking of his/her/group study guide
assignments and/or class participation.
Separately, the Instructor is available for office
hour private counseling through email, telephone, and perhaps
by residential office appointment.
Other assignments may receive feedback and will receive
a grade, recorded in the online grade book that students
may assess their performance.
IV. ATTENDANCE AND PARTICIPATION
online course requires attendance which is measured by (1)
the modular-weekly interactive participation opportunities
in the classroom, (2) mandatory weekly participation through
being called upon to address the class for certain modules
as well as (3) modular study guide assignments.
Missing mandatory weekly participation assignments
is the equivalent of being not prepared in class and will
result in a zero for that assignment.
Not turning in study guide assignments will result
in a zero for that assignment.
V. EVALUATION OF STUDENT
Grades will be determined through a combination of
factors, as follows:
exam - 50%;
study guide assignments – 25%
participation – 25%
VI. REQUIRED TEXTS
texts edited and authored by the Instructor, supplemented
by reference materials.
Reference materials will include source materials
and secondary materials.
is conducted using the Internet WWW as well as, and most
importantly, value added databases which we may supply upon
Introduction. The context of transfer pricing
Definition of transfer pricing
The size of the problem
Development of the Transfer Pricing Rules
Art. 9 of the OECD Model Tax Convention
The 1979 and 1984 OECD Reports on transfer pricing
Impact of the OECD Reports
Developments in the United States
Final U.S. Regulations 1994
The new OECD Guidelines
Tax Versus Managerial Aspects of the Transfer Pricing Problem
Multinational enterprises and intra-group trade
Management control versus tax considerations
Practice in multinational enterprises
The Notion of Control in Transfer Pricing
The notion under Article 9 of the Model Tax Convention and
the commentary to it
The notion interpreted in selected countries
The Arm’s Length Principle
The concept and the origins
The 1995 OECD Guidelines
Problems with the application of the arm’s length
Solutions for the transfer pricing problem?
Transfer Pricing Methods: Traditional Transaction Methods
Introduction and relationship to Article 9
Comparable uncontrolled price method
Resale price method
Cost plus method
Transfer Pricing Methods: Traditional Transaction Methods
Profit split method
Transactional net margin method
Comparable profit method
VIII. Comparability Analysis
Analysis as dealt with in the OECD Guidelines and IRS Section
Reasons for examining comparability
Factors determining comparability
Characteristics of the property or service 2. Functional
analysis 3. Contractual terms 4. Economic circumstances
5. Business strategies
Market penetration strategy 2. Different geographic markets
3. Location savings
The Arm’s Length Range
The concept of an arm's length range
Two arm's length range varieties
Determination of the arm's length range
Adjustments of taxpayer's results outside the arm's length
Transfer Pricing of Intangibles
The OECD: Definition of intangible
The OECD: Applying the arm's length principle to intangible
The OECD: Arm's length pricing where valuation is highly
uncertain at the time of the transaction
United States: Applying the arm's length principle to intangible
Main focus of the OECD Guidelines
Determining whether intra-group services have been provided
2. Determining an arm's length charge in general 3. Identifying
arrangements for charging for intra-group services 4. Calculating
the arm's length consideration
Examples of intra-group services
Cost Contribution Arrangements
Applying the arm's length principle to CCAs
Determining the participants to a CCA
The amount of each participant's contribution
The valuation of each participant's contribution 2. The
determination of the share of the total benefits to be expected
from the CCA by each participant
Introduction 2. Guidance on documentation rules and procedures
3. Useful information for transfer pricing audits 4. General
recommendations on documentation
Burden of Proof
Transfer Pricing Audits
Simultaneous tax examinations
Remarkable facts in specific countries
Disputes and Dispute Solving
Corresponding adjustments and the mutual agreement procedure:
Articles 9 and 25 of the OECD Model Tax Convention
The mutual agreement procedure 2. Corresponding adjustments
: Paragraph 2 of Article 9 3. Concerns with the procedures
4. Recommendations to address concerns a) Time limits
Duration of mutual agreement proceedings
Publication of applicable procedures
Problems concerning collection of tax
and accrual of interest
Advance pricing arrangements
Definition and concept of advance pricing arrangements 2.
Possible approaches for legal and administrative rules governing
advance pricing arrangements 3. Advantages of advance pricing
arrangements 4. Disadvantages relating to advance pricing
arrangements 5. Recommendations a) In general
Coverage of an arrangement
Unilateral versus bilateral (multilateral) arrangements
Equitable access to APAs for all taxpayers
Developing working agreements between competent authorities
and improved procedures
general 2. EC Arbitration Convention
Practical Considerations when Setting Up a Company’s
Transfer Pricing Policy
How to go through the compliance process
Setting-up of parameters of transfer pricing study a) legal
Selecting testing strategy a) transactional method
profit based method
creation of the testing scenario
Collecting necessary documentation a) on controlled legal
on tested parties
on tested transactions
Identifying and evaluating comparable transactions and companies
characterize the tested party
select comparable companies
identify tested party comparables
Performing economic analysis a) Transactional analysis
Profit based analysis
Determining the best method rule
Producing required reports
Use of software packages
Use of CD-Roms when searching for comparables
Online Course Requirements for Certification:
Chartered Wealth Manager - Take LLM 131, and LLM200
Chartered Trust & Estate Planner - Take: LLM111 and
Chartered Portfolio Manager - Take LLM 222
Chartered Risk Manager - Take LLM106 and 110
- Chartered Asset Manager - Take LLM 104 and LLM 105
- Chartered Market Analyst - Take LLM 333 (Must of Masters
Degree, JD or CPA)
- Registered Financial Specialist - LLM 101 and LLM 102