Advance Pricing Agreements (APA) Explored
Over the last few years, multinationals have faced considerable challenges with respect to international tax issues, specifically with transfer pricing (the pricing involved for cross-border intra-firm transactions between related parties). Adding to the challenge is the rigorous regulatory developments and enforcement actions in the ever changing and complex global market. One of the proactive approaches that have emerged to deal with inconsistent rules and/or transfer pricing disputes is the use of Advance Pricing Agreements (APAs). Under an APA, a multinational taxpayer enters into an agreement with one or more tax authorities regarding the appropriate set of criteria to determine the pricing of various inter-company transactions over a defined period of time.
With the growth of cross-border transactions, multinationals must have a complete understanding on how to effectively use APAs to their advantage to keep transfer pricing disputes at bay. Join us as our panel of distinguished thought leaders explore the significant issues surrounding this timely topic plus practical insights on how to get the best out of APAs. The program will be followed by a Q&A session in which the audience will be invited to ask the speakers questions live.
Kerwin Chung, Principal, Transfer Pricing Washington National Tax Practice,
Deloitte Tax LLP
Patrick T. Breslin, MA, Principal,
Brian Vincent, Director,
Economics Partners, LLC
Given widespread economic uncertainty and the fiscal pressures felt by governments worldwide, controversy is increasing in the contentious area of international tax. The OECD’s ‘base erosion and profit shifting’ (or “BEPS”) initiative reflects such concerns, and the UN has become a vocal proponent of international guidance to address multinational transactions between affiliated enterprises (i.e., transfer prices) and their effects on the global tax base. In the past, similar concerns spawned the Advance Pricing Agreement (APA) as a proactive and prospective alternative to long and contentious international tax audits. This experienced panel will discuss APAs from a legal, economic and financial perspective, highlighting the benefits of such agreements in removing the costs and uncertainties associated with defending tax positions through long, drawn out audits. The panel will be an interactive discussion between, Kerwin Chung (Principal, Transfer Pricing Washington National Tax Practice), Pat Breslin, (Principal, Bates White Economic Consulting) and Brian Vincent, (Director Economics Partners, LLC), and will cover the following topics:
- APA Process Overview (Kerwin Chung, Principal, Transfer Pricing Washington National Tax Practice, Deloitte Tax LLP )
- What is an APA and its legal effect?
- Procedural aspects: user fees, filing requirements and deadlines
- Identifying types of transactions that can be covered by an APA
- Types of APAs: unilateral vs. bilateral; Treaty Article 7 APAs
- The IRS Advance Pricing and Mutual Agreement (APMA) Program
- Other current developments on APAs (US and International)
- APAs and Transfer Pricing Controversy (Patrick T. Breslin, MA, Principal, Bates White )
- Uncertainty in national and international tax policy (e.g. OECD “BEPS” initiative)
- APAs as alternative dispute resolution (audit rollbacks and other audit resolution examples)
- How do APAs account for differences in the respective countries’ transfer pricing regulations?
- Horizontal benefits (in other jurisdictions) and other APA benefits
- Case studies and examples (Intangibles transactions, China/US, financial transactions)
- APA Technical issues (Brian Vincent, Director, bEconomics Partners, LLC )
- Selecting Transfer Pricing Methods for an APA and related issues
- APA-specific methods application (transactional and profit-based methods)
- Selected statistics on frequently used transfer pricing methods/analyses
- Other selected technical issues (comparable company adjustments, dealing with business cycle fluctuations/ “down economy” periods, preparation of APA annual reports)
- The role of financial accounts / interpretations (US & foreign GAAP differences, IFRS adoption)
Who Should Attend:
– Revenue Authorities
– Transfer Pricing Practitioners
– Corporate Counsel
– Senior Management
– CFOs & Finance Executives
– Tax Directors
– Tax Managers
– Transfer Pricing Attorneys
– And other related professionals
Kerwin Chung is a Principal in Deloitte Tax LLP’s Washington National Tax Office, and leader of the firm’s National Advance Pricing Agreement (APA) and Mutual Agreement Procedure (MAP) Group. Mr. Chung has nearly 20 years of transfer pricing experience, specializing in APAs, MAP, planning, examinations, and Customs matters. He has served as the taxpayer’s lead negotiator for upwards of 80 APAs and has represented more than 100 taxpayers in the MAP process. His clients include U.S. and foreign-based multinationals in numerous industries, including apparel, automotive, chemicals, computers, construction equipment, consumer electronics, electronic components, food and beverage, industrial machinery, insurance, logistics, office products, pharmaceuticals, photography, professional services, and publishing.
Mr. Chung has been recognized by inclusion in the Legal Media Group’s Guide to the World’s Leading Transfer Pricing Advisers since 2002. He is an active member of the ABA Tax Section Transfer Pricing Committee, having moderated a panel on transfer pricing down economy issues and presented on a panel discussing the IRS APA program.
Kerwin Chung is a Principal in Deloitte Tax LLP’s Washington National Tax Office, and leader of the firm’s National Advance …
Patrick Breslin has extensive experience analyzing complex transactions and regulatory issues in the contexts of litigation and other controversy. He has substantial tax-related controversy, audit, and IRS Appeals experience in transactions involving oil and gas production; the consumer electronics, automotive, pharmaceutical, and medical products industries; and in software, Internet commerce, biotechnology, and other intangible property transactions. He has also served as a consulting expert in patent litigation and testified in major copyright litigation. In addition, Mr. Breslin has been involved in planning, business restructuring, R&D cost-sharing analysis, Advance Pricing Agreements (APAs), audits, and IRS Appeals settlement negotiations involving multinational corporation (MNC) taxpayers. Mr. Breslin was also founder and CEO of Relatable, a software company for which he developed a licensing strategy, negotiated arm’s length software licenses, managed an IP portfolio and conducted business and intangible property valuations.
Patrick Breslin has extensive experience analyzing complex transactions and regulatory issues in the contexts of litigation and other controversy. He …
Brian Vincent is a Director in the Washington, DC office of Economics Partners, LLC. Mr. Vincent’s practice focuses on the provision of international transfer pricing, audit/controversy defense and tax-efficient supply chain planning services. Mr. Vincent has experience in assisting clients with advance pricing agreement negotiations, business restructurings and post-acquisition transfer pricing integration and harmonization efforts. Mr. Vincent has performed applied economic consulting services for clients in a wide array of industries, including private equity and asset management, pharmaceuticals, automotives, industrial components, consumer products, apparel, aerospace and oil and gas exploration and production. Mr. Vincent holds a B.A. in Economics from the University of Maryland, and an M.B.A. in Finance and Accountancy from The George Washington University.
Brian Vincent is a Director in the Washington, DC office of Economics Partners, LLC. Mr. Vincent’s practice focuses on the …
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About Deloitte Tax LLP
Deloitte is the brand under which nearly 200,000 professionals in member firms in more than 150 countries throughout the world collaborate. We provide audit, consulting, financial advisory, risk management, and tax services to deliver one approach that encompasses issues across business and industry concerns. Deloitte’s services give clients powerful business solutions that help them achieve a competitive advantage to succeed wherever they operate.
Deloitte’s globally-managed transfer pricing team helps companies manage risks by aligning practical transfer pricing solutions with overall global business operations and objectives, assists with strategic documentation to support transfer pricing practices, and resolves disputes efficiently.
About Bates White
Bates White is an economic consulting firm offering services to law firms, Fortune 500 companies, and government agencies. We specialize in advanced economic, financial, and econometric analysis and excel at complex matters that require sophisticated problem solving and deep empirical analysis.
Established in 1999 and privately held, we attribute much of our success to a culture where bright minds from diverse backgrounds come together to solve difficult challenges facing today’s decision makers. We build strong, collaborative relationships with our clients, within our team, and in the community. Our firm is distinguished by the strength of our collective experiences—intellectual and analytical rigor, creativity, responsiveness, and practical know-how.
About Economics Partners, LLC
Founded to address a market need, Economics Partners, LLC provides non-leveraged, partner-driven, financial and economic consulting services to large corporate tax departments and law firm clients.
Economics Partners’ transfer pricing professionals have experience with clients operating in a diverse range of industries, including financial services, oil and natural gas resource exploration and production, building materials, consumer products, pharmaceuticals, foods and beverages, automotives, apparel and numerous others. The firm’s services encompass all aspects of the transfer pricing cycle, including planning, controversy and compliance. Our team also includes widely-recognized experts in the areas of intangible asset valuation, business valuations performed for tax-related purposes, economic impact modeling and the valuation and analysis of complex securities.