Event: Transfer Pricing for tech companies focusing on Intangibles

July 26 2022 15:00 – 19:30 at Crowne Plaza

The TechIsland Non Profit Organisation in collaboration with Taxand Cyprus organised a seminar titled “Transfer Pricing for tech companies focusing on Intangibles” on the 26th of July at Crown Plaza Hotel in Limassol.

On Thursday, 30 June 2022 the Cyprus Parliament passed a law introducing detailed Transfer Pricing legislation, marking a new era in company taxation, with effect from 1 January 2022. The OECD Transfer Pricing Guidelines as amended from time to time, have been legislatively incorporated in Cyprus.

Transfer pricing deserves to be a top-of-mind priority. The OECD, United Nations, European Union and individual countries have changed and keep changing their guidance in the field of transfer pricing due to the BEPS Project. The new guidance can be considered a game-changer and is expected to alter the transfer pricing outcomes in many situations. This requires a different approach from both tax authorities and multinational enterprises. A significantly more granular risk and functional analysis should be performed. Companies, as well as tax authorities, need to have a better understanding of how value is created concerning the development and exploitation of their intangibles. A further focus is on how companies and tax authorities should deal with the three-tiered OECD approach related to transfer pricing documentation.

Program:
3:00 – 3:15 Registrations
3:15 – 3:45 Analysis of the new Transfer Pricing rules in Cyprus.
• Income Tax Law amendments and relevant Regulations.
• Assessment and Collection of Taxes Law amendments.
3:45 – 4:15 Transfer Pricing and Intangibles.
• Pricing of intra-group licencing (royalty amount)
• Arm’s length price for R&D activities
4:15 – 4:30 Coffee Break
4:30 – 5:00 IP Box and Transfer Pricing
• Countries with transfer pricing rules in which IP is created usually limit the leeway for profit shifting through transfer pricing rules.
• How transfer pricing prevents IP income from being shifted abroad and impact on IP BOX benefit.
5:00 – 5:30 Overlap between Intangibles under Double Tax Conventions & EU Tax Directives and Transfer Pricing
• Deny treaty benefits on excessive royalties (i.e., non-arm’s length royalty payments).
• Deny treaty benefits in case the royalty payment does not fall under the definition of the tax treaty.
• Deny treaty benefits on mixed contracts (e.g., know-how and the provision of technical assistance)
• Deny treaty benefits in case the recipient is not the beneficial owner of the royalty income.
5:30 – 6:00 Panel Discussion + Q&A
6:00 – 7:30 Networking Cocktail

The seminar was specially tailored to the practical needs of transfer pricing professionals working in the technology sector. It focused on transfer pricing and intangibles (e.g. intra-group royalties) and the overlap between the IP Box and tax treaties.

– Intra-Group Financial Transactions;
– Intra-Group Services;
– Transfer Pricing and Intangibles (e.g. Intra-Group license and R&D);
– Limited risk distributor.

By the end of the seminar, the participants were able to deal with all developments in the field of transfer pricing properly and fully understand the transfer pricing principles and methodologies and their practical application. This 3-hour tax seminar introduced participants to such principles and methodologies and then covers their application to specific categories of intra-group dealings.

Slides:

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