STP supports a client in a cross-border controversy case with the Dutch tax authorities: compensation for the post-restructuring arrangement plus the compensation for the restructuring itself were in dispute.
Our client and the tax authorities were in a dispute as to the treatment of the business restructuring (transfer of entrepreneurial functions) and the selection of the most appropriate method post-restructuring (based on substance and capability to control risk). By strategically opting for a gradual shift in entrepreneurial functions in the course of several years rather than several one-off limited business transfers, STP managed to successfully substantiate that the residual profit split method was the most appropriate method for the post-restructuring arrangement. Based on this approach, the client and the tax authorities were able to come to an agreement for the compensation for the restructuring itself by using a (valuation) multiples approach considering the transferred functions (and associated risks) only.
Transfer Pricing
Due to the recent developments in (worldwide) taxation, it has become vital for your transfer pricing structure to be flawless and sufficiently supported with properly constructed transfer pricing documentation. We will help you to develop a robust transfer pricing structure that will be correct in tax terms and will impact your business model as little as possible.