Structuring alternative investments in the post-BEPS era - module 3: transfer pricing and related documentation requirements

PRESENTATION

Module 3 - 04/05/2023 - 2 to 5 PM : transfer pricing and related documentation requirements

The arm’s length principle is the international transfer pricing standard that OECD member countries have agreed should be used for tax purposes by MNE groups and tax administrations. The arm`s length principle requires that the remuneration for any transaction between related parties conform to that what would have been agreed if the transaction were to have taken place between unrelated parties under comparable circumstances. 

 The arm’s length principle is firmly ingrained in Luxembourg tax law and has been explicitly stated in article 56 of the Luxembourg Income Tax Law (LITL). In addition, several concepts and provisions under Luxembourg tax law require the arm’s length standard to be respected by Luxembourg companies (the concepts of hidden dividend distributions and hidden capital contribution, etc.). 

Over the last years, transfer pricing has become the hot topic in Luxembourg taxation in an environment that relies increasingly less on tax rulings. In the past, tax rulings were viewed as a way to provide certainty and to avoid risks when implementing investments or intra-group transactions. However, for a number of reasons this is no longer the case and transfer pricing documentation is more and more filling the gap as a tax risk management tool.

This workshop will provide an overview of transfer pricing in the context of Alternative Investments and the importance of related documentation.

>>> Program 

• Introduction to transfer pricing 

• • The arm’s length principle

  • The OECD Transfer Pricing Guidelines

  • Luxembourg transfer pricing rules

  • Transfer pricing adjustments

• Typical controlled transactions in Luxembourg

• • Interest rates 

  • Financing activity

  • Intra-group services

  • Fund management services

• Financing activities 

• • Scope of the Transfer Pricing Circular

  • Substance requirements

  • Determining an arm’s length remuneration

  • Transfer pricing analysis

  • Structure alignments in relation to existing investments

  • Treatment in the corporate tax returns

  • Advance pricing agreements (APAs)

• Reporting obligations in the corporate tax returns

• Recent case law

• Transfer pricing documentation

• • Review of transfer pricing and a taxpayer’s co-operation duties

  • The OECD Transfer Pricing Guidelines

  • Best Practice recommendations

• Conclusion

OLIVER R. HOOR
Tax Partner and Head of Transfer Pricing, ATOZ Tax Advisers

Oliver is a Partner in the International & Corporate Tax department at ATOZ.

A tax professional since 2003, Oliver has experience in Luxembourg and international taxation with a focus on alternative Investments (private equity, real estate, sovereign wealth funds, hedge funds), mergers & acquisitions and multinational groups. He advises clients on all direct tax aspects regarding deal structuring, maintenance, reorganisations and exit planning. He also holds the titles of Head of Transfer Pricing and of the German Desk.

Oliver is the author of more than 250 articles and books on Luxembourg and international taxation including Transfer Pricing and related documentation requirements, the OECD Base Erosion and Profit Shifting (BEPS) Project and the EU Anti-Tax Avoidance Directives (ATAD 1/ATAD 2), reporting obligations of tax intermediaries (DAC6), the OECD Model Tax Convention and Tax Treaties, EU Law and the State Aid investigations of the EU Commission (see www.atoz.lu/media-room). He is also a regular speaker at conferences as well as being a lecturer with Legitech and ILA.

Oliver is qualified as a Chartered Accountant in Luxembourg ("Expert-Comptable") and is a certified German tax adviser (Steuerberater). He holds a post-graduate degree in Luxembourg Tax and a degree in Business Administration with a major in Tax from the University of Applied Sciences of Trier, Germany.

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