Introduction to transfer pricing: Agenda

• What is transfer pricing and how does it impact your businesses’ profits, reporting, customs, and taxes?

• Introduction to OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations

• Arm’s length principle. Introduction to primary source Canadian transfer pricing legislation and guidance, such as adjustments, recharacterization, penalties and contemporaneous documentation

• Introduction to the categories of intercompany transactions (or transfers) including definitions of tangible and intangible property, services, and financial transactions

• Impact of global business environment on an entity’s role, risks and profitability

• Understanding an entity’s risk-reward profile through analysis of the functions, risks and assets of an entity

• Introduction to the types of entities based on role, risk-reward profile and positioning in the value chain

Traditional Transaction Methods: Comparable Uncontrolled Price (CUP), Resale Price, Cost Plus

Transactional Profit Methods – Transactional Net Margin Method (TNMM), Profit Split

Determination of method to use. Special considerations for intra-group services: management fees, arm’s length charge

• Meaning of “comparable”

• Comparability factors

• Comparability analysis

• Comparability adjustments

• Develop an understanding of financial statement issues and considerations

• Understanding financial adjustments

• Understanding profit level indicators

• Understanding ranges and multi-year data

• Transfer pricing policies

• Transfer pricing documentation

• Financial statement and other disclosures

• Transfer pricing monitoring and adjustments

• Canada Revenue Agency audit activity

• Country-by-country reporting