Thriving in Diversity and Change 2015 Global Transfer Pricing Forum

Transcription

1 Thriving in Diversity and Change 2015 Global Transfer Pricing Forum The Ritz-Carlton, Millenia Singapore January 2015

2 How Will BEPS Change Your Transfer Pricing Planning? Geoff Soh, moderator Partner, Global Transfer Pricing Services KPMG in Singapore

3 Mei Seen Chang Partner, Global Transfer Pricing Services KPMG in Malaysia With you today Ho-Yin Leung Partner, Global Transfer Pricing Services KPMG in China Stuart McDougall Partner, Global Transfer Pricing Services KPMG in the United Kingdom 2015 KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 3

4 Agenda Overview from Panelists Typical Restructuring Example Discussion and Takeaways 2015 KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 4

5 Overview from Panelists

6 BEPS & Transfer Pricing Developments: China MAP/CA negotiations shut down until after 2015, and OECD/G20 BEPS deliverables issued (based on KPMG Professionals market intelligence) New/updated transfer pricing regulations (Circular 2) expected to be issued for public commentary during 2015 SAT increasingly in the spotlight with publications and external presentations 2015 KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 6

7 BEPS & Transfer Pricing Issues: Malaysia Substance vs form Profit shifting through supply chain restructuring to tax friendly jurisdictions Excessive / unwarranted payments to foreign affiliates Inappropriate / low return for services rendered Business restructuring post tax holiday Lack of commercial substance 2015 KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 7

8 BEPS & Transfer Pricing Issues: Malaysia Main obstacles typically encountered by taxpayers Lack of commercial realism Lack of transparency Acceptance of foreign comparables Lack of skills on auditors part Insufficient resources for APA program 2015 KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 8

9 BEPS & Transfer Pricing Issues: Europe But It s not just about BEPS. Unilateral Action EU Challenges on State Aid + + BEPS 2015 KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 9

10 Typical Restructuring Example

11 Typical Restructuring Example Facts Manufacturer and distributor of consumer products, headquartered in Europe. Operates worldwide including through Local Entities operating in China and Malaysia, among others. Previously operated on a de-centralized business model, in which Local Entities had more management autonomy as entrepreneurs and retained any residual profits. To enhance operating efficiency, the Group restructured itself worldwide. Functional activities, previously conducted by Local Entities, were stripped away and shifted to new Regional Entities KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 11

12 Typical Restructuring Example Examples of changes Local Entity: Shift from a manufacturer to a contract manufacturer for the Regional Entity. New Regional Entity: Operates as the master distributor, purchasing from Local Entities (contract manufacturers) and selling to other Local Entities operating as low risk distributors. Can we still apply these opportunities into our value chain, in the light of BEPS? 2015 KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 12

13 Discussion and Takeaways

14 Questions Presentation by Name Surname

15 Thank you Presentation by Name Surname

16 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.