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Beyond transfer pricing: Defending the tax deductibility of inter-company royalty and service charges

Defending the tax deductibility of inter-company royalty and service charges

Defending the tax deductibility of inter-company royalty and service charges

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The deductibility of inter-company royalty (license fee) and service fees continues to be scrutinized by the authorities during tax investigation activities. 

Beyond the typical questions on the pricing of inter-company charges, tax authorities are requesting evidence on the substance of these transactions e.g., proof that the intangible property (IP) associated with the royalty/ license has economic value, or services have been rendered and provide economic benefits to the Vietnamese taxpayer.  In light of these challenges, here are some pressing questions and considerations in regard to royalty and service charges.

  • How do we prepare and maintain documents to support the substance of a transaction?
  • What are the proofs that the IP, or services, provide economic value and benefits to the taxpayer?
  • How do we calculate the royalty (license fees) or service charges?  Has benchmarking analysis been conducted to support the arm’s length pricing (market pricing) of such transaction?
  • Do we need to draft or register legal documents with appropriate competent authority? (e.g. royalty / license agreements generally require registration with appropriate authorities).  

Please join us for an in-depth one-hour webinar with our Tax and Legal experts to discuss key considerations, and leading practices on how to defend and/or mitigate potential risks.

Date & Time

English Session: 

Date and Time:14:00 – 15:15 Thursday, 04 June, 2020

Vietnamese Session:

Date and Time:14:00 – 15:10 Friday, 05 June, 2020

Contact Us

If you have any questions, please contact Ms. Thao, E: thaopham1@kpmg.com.vn  

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