The Benelux Chamber of Commerce in China is delighted to invite you to an SME on Friday May 20 2011:
Supply Chain Beyond Compliance:
A coordinated approach between transfer pricing and customs/trade compliance
Opportunities and risks
Transfer pricing is typically seen in China as a mere compliance exercise that foreign invested companies have to go through in the same way they have to deal with financial reporting or other regulatory requirements. In general, subsidiaries are equipped with Chinese documentation reports, in line with the new regulations (2008). These are generally seen as a cost burden for the company with limited outreach. In reality, transfer pricing has far broader implications than the current treatment it receives in China. The structuring and evaluation of intra-group flows has a number of implications;
• Tax implications, the most obvious being the corporate income tax burden and the risk of double taxation, but also, implication on other taxes such as import taxes (customs duties, consumption taxes) and business taxes / withholding taxes.
• Financial implications, notably in relation to cash repatriation and other financial arrangements with a Joint Venture partner or a group subsidiary.
• Strategic implications, for instance in case where non optimal group decisions are taken due to wrong transfer pricing policy (External vs. Internal sourcing)
• Transfer pricing and Customs valuation (defining the base for import taxes) are also quite closely linked and hence need an coordinate approach.
Overall, a sub-efficient / sub-optimal structuring and evaluation of intra-group transactions may lower significantly the competitiveness of Chinese operations (notably due to high import taxes) and hinders growth in the region.
Companies should therefore enhance the growth and profitability of their operations by buidling a reliable and sustainable system of intra-group transactions, which copes with significant growth.
This seminar will cover these issues, and present companies with elements they can benefit from when aligning transfer pricing with their customs and trade compliance.
Sébastien Gonnet
Sébastien Gonnet is a Principal at NERA Economic Consulting. He specializes in transfer pricing and intellectual property. He advises multinational companies in China and Europe in the design, documentation and defense of transfer pricing systems (intra-group transfers of goods, services, intangible - brands/patents/know-how...), in a broad range of industries. Sébastien frequently publishes in transfer pricing and international tax reviews, and regularly is a speaker at conferences in Europe.
He is responsible for the Beijing office of NERA Economic Consulting.
Sebastien is graduated from HEC and from Paris II University in international taxation.
Paul Verrips
Paul Verrips is an independent consultant focusing on supply chain strategy and security. He advises his global clients on supply chain issues with a focus on legislative matters. His professional career included senior management functions in broad range of industries as well as chairing several international organisations in the governmental affairs sector. Paul is currently the Chair of a Swiss research institute of supply chain security as well as an MBA lecturer on international trade. He has co-authored several governmental studies on trade. He has a background in finance, supply chain, tax and public affairs.