One minute with Stephen Alleway, Questro International.
What are you working on?
Quite a lot of IP planning projects, a few more general BEPS readiness projects, and two pan-European documentation/defence engagements.
Multinationals are getting to grips with country by country reporting. In your experience, is there a key area they miss?
Yes, too many corporates are focusing purely on the administrative aspects of populating table 1 and table 2 with the correct data and have not adequately considered their strategy for mitigating tax authority questions, i.e. their table 3 disclosures.
What are the key elements of a robust transfer pricing framework?
We use the term ‘TP sustainability’ at Questro. For me, it comes down to a TP model that follows the substance of the underlying business arrangements; a good day to day TP management policy that everyone understands and actions; and an overall control framework to catch problems early.
Is there a recent development in TP by a particular country which has caused clients potential difficulties?
The April draft of the US treasury section 385 regulations caused some of my clients a few sleepless nights. This has been somewhat mitigated in the final regulations published in October, which are far less controversial. From a TP perspective, clients were given a sharp reminder in the April draft of the importance of preparing intra-group legal agreements and supporting documentation in a timely manner in order to secure the tax deduction of an arrangement.
Do you expect to see TP disputes increase or decrease in the coming years?
Unfortunately, the stage is set for a significant increase in disputes going forward. The BEPS reports themselves introduce a lot of subjective language that can be interpreted in many ways, tax authorities are under pressure to raise revenue at the same time as reducing headline tax rates, and the public mood towards even legitimate ‘tax planning’ has hardened significantly.
If you could make one change to tax law or practice, in any country, what would it be?
From a purely business perspective, I would be very happy if Switzerland introduced mandatory annual TP documentation requirements, but I’m not sure my clients would share my enthusiasm for such a change! Seriously though, I’d like to see more consistency on local implementation of BEPS Action 13, to enable corporates to reduce global compliance spend.
Aside from your immediate colleagues, who in tax do you most admire?
I was lucky enough to start my career working for Chris Rolfe, who was then chairman of the global transfer pricing group at Coopers & Lybrand, and a leading light in the field. He was a great teacher (many years retired now), and I will always be thankful to him for the start he gave me.
What service areas within or connected to transfer pricing do you expect to see most growth in this next year?
Without any doubt, IT solutions are on top of many corporate wish lists for 2017. Whether to assist CBCR or provide more holistic solutions for data management and compliance work, I believe we are currently at the start of an IT revolution in TP and tax.
Finally, you might not know this about me but…
I’m happiest when skiing from Piz Sezner to Vella (a gloriously long panoramic run in the Obersaxen Mundaun) with my two young sons. Despite the poor snow this year, I’m hopeful for a great February.
One minute with Stephen Alleway, Questro International.
What are you working on?
Quite a lot of IP planning projects, a few more general BEPS readiness projects, and two pan-European documentation/defence engagements.
Multinationals are getting to grips with country by country reporting. In your experience, is there a key area they miss?
Yes, too many corporates are focusing purely on the administrative aspects of populating table 1 and table 2 with the correct data and have not adequately considered their strategy for mitigating tax authority questions, i.e. their table 3 disclosures.
What are the key elements of a robust transfer pricing framework?
We use the term ‘TP sustainability’ at Questro. For me, it comes down to a TP model that follows the substance of the underlying business arrangements; a good day to day TP management policy that everyone understands and actions; and an overall control framework to catch problems early.
Is there a recent development in TP by a particular country which has caused clients potential difficulties?
The April draft of the US treasury section 385 regulations caused some of my clients a few sleepless nights. This has been somewhat mitigated in the final regulations published in October, which are far less controversial. From a TP perspective, clients were given a sharp reminder in the April draft of the importance of preparing intra-group legal agreements and supporting documentation in a timely manner in order to secure the tax deduction of an arrangement.
Do you expect to see TP disputes increase or decrease in the coming years?
Unfortunately, the stage is set for a significant increase in disputes going forward. The BEPS reports themselves introduce a lot of subjective language that can be interpreted in many ways, tax authorities are under pressure to raise revenue at the same time as reducing headline tax rates, and the public mood towards even legitimate ‘tax planning’ has hardened significantly.
If you could make one change to tax law or practice, in any country, what would it be?
From a purely business perspective, I would be very happy if Switzerland introduced mandatory annual TP documentation requirements, but I’m not sure my clients would share my enthusiasm for such a change! Seriously though, I’d like to see more consistency on local implementation of BEPS Action 13, to enable corporates to reduce global compliance spend.
Aside from your immediate colleagues, who in tax do you most admire?
I was lucky enough to start my career working for Chris Rolfe, who was then chairman of the global transfer pricing group at Coopers & Lybrand, and a leading light in the field. He was a great teacher (many years retired now), and I will always be thankful to him for the start he gave me.
What service areas within or connected to transfer pricing do you expect to see most growth in this next year?
Without any doubt, IT solutions are on top of many corporate wish lists for 2017. Whether to assist CBCR or provide more holistic solutions for data management and compliance work, I believe we are currently at the start of an IT revolution in TP and tax.
Finally, you might not know this about me but…
I’m happiest when skiing from Piz Sezner to Vella (a gloriously long panoramic run in the Obersaxen Mundaun) with my two young sons. Despite the poor snow this year, I’m hopeful for a great February.
