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Transfer pricing study Table of Contents #1

 

SAMPLE TRANSFER PRICING STUDIES

STUDY 2: COMPLEX

 

CANCO, a Canadian manufacturer developed widgets using proprietary research. CANCO holds patent for its widgets and licensed its U.S. based subsidiary USCO to manufacture and distribute the widgets in the United States. CANCO also provides some product support services and some administrative services to USCO and allocates part of its product support and administrative expenses to USCO.

TABLE OF CONTENTS

  1. Scope and use of report
  2. Executive summary
  3. Statement of facts
    1. Introduction
    2. History of North American operations
    3. Organizational structure - legal and functional
    4. Description of entities
      1. CANCO
      2. USCO
    5. Description of product
  4. Industry analysis
    1. General overview
    2. The U.S. market for widgets
    3. Competitive factors
    4. Customers and distribution channels
    5. Value chain of the widget industry
    6. Industry trends
  5. Functional analysis
    1. Description of transactions
    2. Calculation of royalty rate
    3. Allocation of product support expenses
    4. Allocation of administrative expenses
    5. Description of functions
      1. Research and development
      2. Manufacturing
      3. Marketing and sales
      4. Administration and other services
      5. Product support services
    6. Description of intangibles
      1. Major intangibles ownership and value
      2. Minor intangibles ownership and value
      3. Patent protection time and effectiveness
    7. Description of risks
      1. Market risk
      2. R & D risks
      3. Product liability risk
      4. Other risks
    8. Assets employed
      1. R & D facilities
      2. Working capital
      3. Capital assets
      4. Manufacturing intangibles
      5. Marketing intangibles
  6. Current transfer pricing laws and regulations
    1. Overview
    2. OECD guidelines
    3. Canadian legislation
    4. U.S. regulations
  7. Allocation of expenses to USCO
    1. Product support services
      1. Benefit provided
      2. Analysis of allocation vs. mark-up
      3. Reasonability of allocation key
    2. Administrative services
      1. Benefit provided
      2. Analysis of allocation vs. mark-up
      3. Reasonability of allocation key
  8. Economic analysis - royalty rate
    1. Introduction
    2. Selection of method
    3. Identification and analysis of comparable licensing agreements
    4. Terms of agreements and data adjustments
    5. Valuation considerations
    6. Analysis of results
  9. Conclusion and recommendations

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Go to Sample Transfer Pricing Study 1 - Table of Contents

 

 

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