- Global mobility is about people crossing borders working in one jurisdiction but part of an international group.
- Transfer Pricing is about the appropriate allocation of revenues and cost between connected group entities and in particular across borders.
Whilst the focus within mobility programmes can sometimes understandably be on payroll and social security considerations, there are other considerations that are also very relevant when employees cross borders or transfer between entities within a multi-national group, which can sometimes get overlooked.
Where people move, functions and risks often follow. Where people move across borders, considerations such as what value is being created, where that value is being created and for whom it is being created are critical. Transfer pricing is about the allocation of profits between entities and across borders, which in turn require careful legal drafting and ensuring that transfer pricing considerations are front and centre.
This Webinar considered the interaction between “people” and “transfer pricing”. Underpinning the movement of people and functions with the related allocation of profits and “remuneration” for services being rendered are the contractual arrangements supporting the intra group transactions.
Documentation is critical – in order to clearly set out the roles, the responsibility, the functions being created and for which entity and the appropriate remuneration methodology. Lack of documentation or even documentation that does not align with the commercial reality on the ground has the potential to create tax risk in the event of a Revenue intervention.
The final piece of the puzzle is the accounting and financial reporting. It is vital that the statutory accounts reflect the underlying substance of the transactions – is it a cost plus, a low value service, profit allocation. Any disconnect between the accounts and the legal documentation will likely give rise to questions in the event of a Revenue intervention.
Contact Us
At RBK, we can assist you with global mobility and transfer pricing matters, including the tax, transfer pricing and legal considerations arising from cross-border working arrangements, secondments and intra-group services. Please get in touch with Sobhana Rao, Richard McAufield or Ronan McGivern and we would be happy to discuss any queries further with you.
Disclaimer: While every effort has been made to ensure the accuracy of information within this publication is correct at the time of going to print, RBK do not accept any responsibility for any errors, omissions or misinformation whatsoever in this publication and shall have no liability whatsoever. The information contained in this publication is not intended to be advice on any particular matter. No reader should act on the basis of any matter contained in this publication without appropriate professional advice.
