Workshop on "Advance Ruling on Customs Valuation and Challenges with Transfer Pricing"

Transcription

1 Workshop on "Advance Ruling on Customs Valuation and Challenges with Transfer Pricing" Co-organised by Delegation of the European Union to Thailand and The Customs Department of Thailand This project is funded by European Union

2 Transfer Pricing Risk Management Solutions and Experiences

3 Varied environment; Jurisdictions differ; Particular approach;

4 The Netherlands DECISION Risk Analysis TP Board Customs Intelligence TP Panel TP UNIT Tax Administration Investigation

5 significant tax issues that tax administrations have to manage; large amounts of tax; understanding of the facts and specific commercial context; resource intensive;

6 Effective risk assessment; Selected for audit or enquiry; Explicit governance process; Progress in transfer pricing cases; Reaching a decision;

7 Biggest risks; Fear of double taxation; multi-national enterprises allocate their global profits; allocate profits to low tax jurisdictions;

8 Transfer pricing risks; Cases are complex; Tax from transfer pricing audits; Obtaining information across borders; Risk assessment process central;

9 Risk Identification; Specific cases for transfer pricing; Sophisticated methods; Identify particular risks; Transfer pricing cases as a matter of routine;

10 Information sources; Databases; Customs data; Patent office; Intelligence; Public domain;

11 Business understanding And Risk identification; Bottom up: Consider info from border-crossings Top down: Assessment of profitablity

12 Key thoughts for risk management: More targeted; Clearly defined documentation; Shorter timescales.

13 The way an audit or enquiry is opened is a key factor; Risk identification process plays a critical part; Discussion of complex technical arguments;

14 The value of early dialogue; Taxpayers presentation; Discussion; Early identification on impacy;

15 Example of UK s use of sector experts: Identify the nature and type of records specifically targeted; Resulted in far smaller volumes; provided for less misunderstanding; time taken to resolve enquiries;

16 Obtaining the transfer pricing documents; What documentation needs to be maintained by MNEs; Advantages and disadvantages;

17 Key thoughts: Audits focused and specific; Founded on Risk Identification;

18 Requests for business documents; Document management;

19 Scope of the audit or enquiry: Resource planning Process and timetable Process and timetable:

20 Maintaining progress, tackling delay; Requests for business records; Business records: document management;

21 The importance of good communication; Enhanced relationship; Quality engagement; Understandable reasons;

22 Agreed on clear timetable; Enhanced relationship; Horizontal monitoring; Early knowledge about Risks; Transparency of taxpayer;

23 An example of constructive facilitation by advisors: Following rigorous testing by specialists in HMRC, this model sat in a data room in the offices of the MNE s advisers but with access provided to all parties;

24 Use of specialists; Monitoring progress and active management; Clear project plans; Focused examination of the risks;

25 Action plan reviews; a summary; a brief résumé; an assessment; a re-evaluation of risks;

26 Thank you for your attention