How to fight State Aid cases through a full "value chain analysis" - the Starbucks and Apple cases?
Channel: MyTPAGlobal
Date: 2016-11-17

The recent tax and transfer pricing related European State Aid cases have shown the importance of understanding how and where value is created within a multinational. Especially from a transfer pricing perspective the understanding of the relevant value chain is of fundamental importance, because it addresses the economic logic of why the multinational exists in the first place.

In the public version of the “Starbucks decision” of the European Commission, quite often reference is made to the transfer pricing report of Starbucks. Although no public version of this transfer pricing report is made available, it seems reasonable to conclude that the report did not include a proper value chain analysis. With respect to the Apple decision of the European Commission, it is too early to estimate this and we most likely have to wait several months for a public available version.

Following these two decisions, i.e. the “Starbucks decision” and the public version of the preliminary Apple decision as published in 2014, we estimate that a properly documented value chain analysis could possibly have mitigated the risk of certain granted APA’s being considered as forbidden “State Aid”.

The focus of an in-depth value chain analysis should be identifying the economically significant and value creating functions within a business and their impact on intercompany pricing, and the parties responsible for the relevant functionality.

This webinar is an excellent opportunity for experienced tax professionals in MNEs to be in a better theoretical and practical position to handle and assess a value chain analysis.

During this webinar the following highlights and aspects of using the value chain analysis approach will be addressed:

- Is including a value chain analysis an imperative for a robust TP documentation?
- How to align the value chain analysis with the financial data of the multinational?
- Is a value chain analysis prerequisite when concluding uni/bi/multi-lateral APA’s?
- Does a value chain analysis protect against European State Aid claims; even without an APA?

Hosts
+ Igor Peters, Partner, TPA Global (NL)
+ Patrick Tijhuis, Associate, TPA Global (NL)