Practice

Transfer Pricing

In today's environment, transfer pricing needs to be done effectively. It needs proper analysis and clear communication.

Representative experience

Performed and documented a detailed value chain and functional analysis plus profit-split calculations to support a client's negotiations with a tax authority prelitigation.

Advised a UK-based multinational on historic thin capitalization, and modeled impact of new interest deductibility rules.

Designed and implemented a new brand licensing structure for a FTSE-100 company across its operations worldwide.

Advised a global business on supply chain optimisation and the creation of a single hub for IP, procurement and sales related activities.

Conducted a critical review of a tax authority's profit-split model to support MAP negotiations, and helped develop alternative parameters for calculations.

Drafted expert opinions on a number of cases involving allegations of value-shifting through non-arm's length transfer pricing.

Events

DPT / TP and dispute resolution breakfast seminar: Spring 2018

The Hogan Lovells tax and transfer pricing team are delighted to invite you to their 2018 breakfast seminar on DPT/TP and dispute resolution, again with guest speaker Mark Carnduff from...

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Events

TP/Disputes Breakfast Seminar

The Hogan Lovells DPT / TP and dispute resolution seminar, with guest speaker Mark Carnduff from HMRC, will be taking place on Wednesday 28 June. Mark has recently moved from Business...

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Hogan Lovells Publications

Transfer pricing and mergers and acquisitions in Africa

As a result of competitive pressures, the current global economic conditions and advancements in technology, multinational enterprises (MNE) are often forced to adapt their business by...

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Hogan Lovells Publications

Transfer pricing documentation – Soon to be compulsory?

Currently, South African law does not explicitly require taxpayers to be in possession of transfer pricing documentation. Legislation does, however, place an onus on the taxpayer to prove that its cross-border related party transactions entered into are arm’s length. This essentially means that an analysis should be conducted to prove the arm's length nature, which is usually through the drafting of a transfer pricing document. Therefore, although documentation is not legally compulsory, it is required to discharge the taxpayer's onus of proof. The confusion is soon to be cleared up. On 15 December 2015, a Draft Notice in terms of section 29 of the Tax Administration Act 2011, was issued by the South Africa Revenue Service (SARS) setting out additional record-keeping requirements for “potentially affected transactions”. The Draft Notice contains a comprehensive schedule of requirements indicating which records, books of account or documents taxpayers must retain relating to their cross-border related party transactions. Taxpayers who are members of a group with a consolidated South African turnover of over ZAR1 billion need to maintain all the documentation and records listed. This would require all companies that exceed this threshold to draft comprehensive transfer pricing documentation for each member of the group. Those with a consolidated South African turnover of less than ZAR1 billion are still required to retain documentation, which can satisfy SARS that the affected transactions are being conducted at arm's length. This in essence would result in taxpayers needing to draft transfer pricing documentation even though they are below the threshold. Accordingly, we advise companies without any transfer pricing documentation to make an effort to get their affairs in order. The Public Notice and the Schedule's full list of requirements can be found at: http://www.sars.gov.za/AllDocs/LegalDoclib/Drafts/LAPD-LPrep-Draft-2015-66%20-%20Draft%20Notice%20in%20terms%20on%20section%2029%20Tax%20Administration%20Act.pdf

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