Ernst & Young UK's Transfer Pricing case studies - FTSE 100 media company - Ernst & Young - United Kingdom

Assignment
Assistance with controversy in relation to the transfer pricing of trademarks registered in European jurisdictions and franchises operating in those jurisdictions. Ernst and Young specifically undertook the following:

• Functional and economic analysis in relation to inter-company transactions. This involved external comparable analysis and fact finding as part of a functional analysis to consider value drivers, ownership of intangibles, functions actually performed etc.
• Strategy formulation for best managing the results of the economic analysis into an agreement with HMRC and the IRS as to the quantum of the adjustments appropriate. This work was performed in partnership with the Client’s Tax function to ensure that the analysis was aligned with the economic reality.
• On going Fiscal Authority handling and advice in relation to achieving an early agreement on figures acceptable the Client (including Competent Authority handling to best ensure the elimination of double taxation).

Result
Frontier economic modelling techniques were applied to ensure accuracy – the current differences in practice between HMRC and the IRS with respect to IP pricing presented additional challenges which were met with a thorough understanding of the industry and the transactions in question.

Client testimonial
“The Transfer Pricing project has been a great success both in terms of quality of work and the speed with which this study has allowed us to agree a beneficial settlement with the Revenue on prior years. The project was very complex.”