What You Need to Know About Intercompany Agreements After Base Erosion and Profit Shifting (BEPS)
Sponsored by Bloomberg BNA and Mayer Brown
Intercompany agreements should reflect the functional, legal, and economic allocations of responsibilities and risks that support a taxpayer's transfer pricing positions. Notwithstanding the importance of these agreements, it is easy to put little effort into drafting these documents even though a poorly drafted intercompany agreement can, and often does, lead to major transfer pricing disputes. Indeed, these agreements sometimes fail to reflect the economic realities of a transaction or don’t sufficiently address or anticipate changes such as BEPS developments, the invalidation of regulatory requirements as in Altera, and other important changes, like proposed regulations such as those promulgated under section 385.
Brian Kittle and Scott Stewart will review the key steps and best practices required to write effective intercompany agreements that avoid penalties and controversy. They will examine:
• Requirements imposed by both the final BEPS action items and section 382 on intercompany agreements;
• Agreements that, for example, fail to define the IP properly, omit key terms and conditions (e.g., the sales base on which royalties are paid and the owner of future-developed IP), and/or contain limited terms and/or short-term termination clauses wholly inconsistent with the long-term investment (and assumption of risk) required for a licensee to exploit the IP;
• Sales and marketing agreements that purport to limit the risk of a distribution affiliate, but which lack any significant substantive provision effectuating such intent;
• Compensation arrangements for all different kinds of related-party transactions that merely cross-reference the "arm's-length standard";
• Instances where the agreements have created unforeseen and unexpected issues.
Educational Objectives:
• Get practical tips and a basic approach to drafting intercompany agreements that will be beneficial, defensible, and sufficiently flexible and enduring to the company
• Learn from best practices in drafting intercompany agreements using real examples of company agreements to demonstrate how to bolster a taxpayer’s tax positions
• Know how to avoid unnecessary controversy and the imposition of IRS penalties
Brian Kittle and Scott Stewart will review the key steps and best practices required to write effective intercompany agreements that avoid penalties and controversy. They will examine:
• Requirements imposed by both the final BEPS action items and section 382 on intercompany agreements;
• Agreements that, for example, fail to define the IP properly, omit key terms and conditions (e.g., the sales base on which royalties are paid and the owner of future-developed IP), and/or contain limited terms and/or short-term termination clauses wholly inconsistent with the long-term investment (and assumption of risk) required for a licensee to exploit the IP;
• Sales and marketing agreements that purport to limit the risk of a distribution affiliate, but which lack any significant substantive provision effectuating such intent;
• Compensation arrangements for all different kinds of related-party transactions that merely cross-reference the "arm's-length standard";
• Instances where the agreements have created unforeseen and unexpected issues.
Educational Objectives:
• Get practical tips and a basic approach to drafting intercompany agreements that will be beneficial, defensible, and sufficiently flexible and enduring to the company
• Learn from best practices in drafting intercompany agreements using real examples of company agreements to demonstrate how to bolster a taxpayer’s tax positions
• Know how to avoid unnecessary controversy and the imposition of IRS penalties
FREE!
Online - Participatory
Online - Participatory
Total CLE = 1 unit
June 23, 2016, 10:00 am to 11:00 am PT
For further information see:
http://www.bna.com/need-know-intercompany-m57982072438/?elqTrackId=f9d679b6ff394fd7a709bda39d6a7ad9&elq=070646a2edb94106933e4e1346f9cfc6&elqaid=5248&elqat=1&elqCampaignId=3133
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