Harmonization of Transfer Pricing and Customs

  • Accountant
  • AFSP
  • CRTP
  • CPA (US)
  • EA
  • ORTP
  • MRTP
  • CFIRS
  • CWS

Published: November, 2021

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  • Course Description
  • Course Qualification
  • Presenter
  • FAQ

Course Description

Overview

  • Transfer pricing and customs harmonization
    5 mins
  • Customs valuation: Most common method
    18 mins
  • The following items constitute "Assists"
    24 mins
  • Code SEC 1059A: WHIPSAW
    44 mins
  • Adjustments to transfer prices and duty implications
    57 mins

Course Description

Transfer pricing concerns the arm’s length nature of any intercompany price. Any good imported into the U.S. by a related party must be arm’s length, and the IRS wants reassurance that the price is the same price unrelated parties would have charged.

Customs (“CBP”) is concerned with the arm’s length nature of the so-called Transactions value. This value is “declared” for Customs purposes when a related party imports a good into the U.S. from another related party located outside the U.S. Further, the Transaction value of imported goods must accurately reflect all dutiable cost elements.

Remarkably, CPB and the IRS have the same focus on the price of the imported good: its arm’s length nature. Given the overlap, it appears there is an opportunity for a unified approach so taxpayers would not need to keep duplicate records.

However, while the arm’s length principle for the two groups is foundational to the valuation of the imported reasonable price, the groups have a different attitude regarding the import price. The IRS thinks the imported price is above arm’s length, thus reducing taxable income. CBP believes the related party imported price is below arm’s length, thus decreasing the duty owed by the importer.

Before the Tax Reform act of 1986, taxpayers would use two prices on the same imported good. One was a low price to avoid duty and a high price to limit income taxation. The elimination of this so-called “whipsaw” occurred via the addition of IRC 1059(A). This code section permits only one price for customs and tax, and the price at issue can be no higher than the Transaction value. In effect, 1059(A) establishes a ceiling on the transfer price.

This CPE webinar will examine the evolution of cooperation between the IRS and CBP and the many ways Transfer Pricing contemporaneous documentation and APA agreements may inform a Customs audit. Further, the collaboration continues globally as tax and customs cooperation occurs frequently in countries around the world by covering the following major topics:

  • Customs and Tax valuation methods
  • The Customs requirement that the circumstances of the sale denote that the price is arm's-length and that the relationship between affiliated parties does not affect the imported price
  • IRC 1059(A)
  • Relationship between the OECD and World Trade Organization ("WTO")
  • Advanced Pricing Agreements ("APAs")
  • The Transaction value for tangible goods
  • Duty on Intangible Elements and assists
  • Royalties and Customs penalties
  • Customs value liquidation
  • Transfer Pricing and Customs planning: First Sale Rule and APAs
  • Dispute resolution overlaps for Customs and Transfer Pricing
  • COVID — 19 impacts and Supply Chain Disruptions
  • Post-importation adjustments and duty recovery


Note:- William Seegar moved on from this world. With sadness in our hearts, we find solace in knowing that he’s in a better place. This is a recorded webinar of his live webinar. For any queries please contact us at support@my-cpe.com

Learning Objectives

  • Recognize how dispute resolution works for Customs and how Transfer documentation is used as part of the process
  • Identify opportunities for joint planning between Customs and Transfer Pricing
  • Identify total tax liability and required adjustment processes for customs duties and other indirect taxes
  • Recognize how to ensure contemporaneous documentation fully covers the formula-pricing approach of the customs rules and comports with the economic analysis in any transfer-pricing studies or APAs
  • Identify the importance of the effect of local procedure requirements on adjustment processes

Recommended For

  • The IRS approved CE course is recommended for CPAs, EAs, AFSPs, Tax Practitioners and their staff, and Tax Attorneys who deal with cross-border tax compliance and planning issues
  • The CPE course is recommended for professionals in public practice and industry Business tax and finance executives, directors, managers and staff, accountants, attorneys, and financial advisors who work with and advise businesses and individuals with cross-border operations, activities and issues.
  • The CE/CPE webinar is suitable for all tax and transfer pricing professionals, including in-house tax and accounting personnel (e.g. directors, managers and CFOs), lawyers and tax advisers who deal with cross-border transactions, structures or cases and wish to understand the risks, challenges and controversies related to transfer pricing.

Who Should Attend?

  • Bookkeepers & Accountants & Tax Preparers
  • California Registered Tax Professional
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • Enrolled Agent
  • Maryland Tax Preparers
  • Oregon Tax Preparers
  • Tax Accountant (Industry)
  • Tax Attorney
  • Tax Director (Industry)
  • Tax Firm
  • Tax Managers
  • Tax Practitioners
  • Tax Preparer
  • Tax Professionals
  • Tax Pros
  • Young CPA

Course Qualification

Webinar Qualifies For

  • 1 CE Credit of Federal tax-related matters for Enrolled Agents (EA) (Approval No. GEHNZ-T-00759-21-S)
  • 1 CPE Credit of Taxes for Certified Public Accountants (CPA-US)
  • 1 CE Credit of Federal tax-related matters for California Registered Tax Preparers (CRTP) (Approval No. 6273-CE-0702)
  • 1 CE Credit of Federal tax-related matters for Annual Filing Season Program (AFSP)
  • 1 CE Credit of Federal tax-related matters for Oregon Registered Tax Preparers (ORTP) (Approval No. GEHNZ-T-00759-21-S)
  • 1 CE Credit of Federal tax-related matters for Maryland Tax Preparer (MRTP) (Approval No. GEHNZ-T-00759-21-S)
  • 1 CE Credit for Certified Fiduciary & Investment Risk Specialist (CFIRS)
  • 1 CE Credit for Certified Wealth Strategist (CWS)
  • 1 General Credit for Accountant/Bookeeper

Additional details

  • Course Level :
    Basic
  • Credits :
    1
  • Instructional Method :
    QAS Self Study
  • Pre-requisites :
    None
  • Advance Preparation :
    None

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MY-CPE LLC (Sponsor Id#: GEHNZ) has entered into an agreement with the Internal Revenue Service, to meet the requirements of 31 Code of Federal Regulations, section 10.6(g), covering maintenance of attendance records, retention of program outlines, qualifications of instructors, and length of class hours. This agreement does not constitute an endorsement by the IRS as to the quality of the program or its contribution to the professional competence of the enrolled individual. Credit earned by attendees with a PTIN will be reported directly to the IRS as required of all providers. To ensure your CPE hours are reported, update your profile in My Account to include your PTIN number. Please note: IRS CE is only mandatory for EAs and ERPAs. For all other tax return preparers, CE is voluntary.

NASBA APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC (Sponsor Id#: 143597) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.NASBARegistry.org.

CTEC APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC (Sponsor ID# : 6273) has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, toll-free by phone at (877) 850-2832, or on the Internet at www.ctec.org.

Presenter

About Presenter

William Seeger

President, QuantEcon Consulting

Dr. Seeger is currently a Clinical Professor of Economics at the University of Texas at Arlington, College of Business Administration, and President of Quantecon Consulting, an Economic consulting firm.  The focus of his academic research is Transfer Pricing and International Tax issues. Upon his retirement in October 2014, Dr. Seeger was a Principal in KPMG’s Global Transfer Pricing Services practice. He was practice leader, Economic and Valuation Services, for the Dallas, Houston and Denver Business Units and a senior economist and Southwest area lead for KPMG’s Economic Consulting Practice. Dr. Seeger has twenty years of experience in public accounting and three years’ experience with the Internal Revenue Service as an Industry Economist in the Comprehensive Examination Program. 

In his public accounting career, Dr Seeger specialized in economic and tax issues related to tax efficient structuring of the operations of multinational organizations. He has advised clients on the Transfer Pricing economics related to intercompany financing, deferral, intangible planning, services, shared cost allocations, and operational price setting. While at KPMG, Dr. Seeger led Transfer Pricing teams as part of KPMG's financial statement audits of clients related to Fin 48 matters, assisted in Transfer Pricing Dispute Resolution, helped clients with negotiating and establishing their Advance Pricing Agreements, worked with KPMG's Mergers and Acquisitions teams on Transfer Pricing exposures of potential target acquisitions, and served as part of KPMG's Quality review team finalizing TP reports for release to clients.

As the market leader for KPMG in the Dallas/Denver Business unit, Dr. Seeger had oversight in the areas of Oil and Gas, Engineering and Construction, Consumer and Industrial Business, and Financial Services. He was the Southwest area practice leader for Transfer Pricing services and Economic Consulting Services, the Global market leader for Energy and Natural Resources in the areas of oil and gas, chemicals, utilities, engineering and construction, and mining and forestry, and the National Transfer Pricing leader for the Engineering, Construction, and Procurement industry market segment.

Dr. Seeger has a PhD and MA in Political Economy from the University of Texas at Dallas, with specializations in Industrial Regulation and Econometrics, and a BA in Economics from the University of Notre Dame, with a concentration in Quantitative Economics. He is currently a candidate for a Master’s degree in Jurisprudence in International Taxation from the Texas A&M University Law School.  

About Company

QuantEcon Consulting

quanteconconsulting.com/

Economic Consulting Services including Transfer Pricing / Dispute Resolution / International Trade / Policy & Taxation / Forensic Investigation / Public Speaking for mid to large size businesses.

We are a team of diverse professionals who recognize that success in business depends upon a multidisciplinary approach to problems. Problems and their solutions are never one dimensional;  as such our diverse skills provide a unique platform upon which all facets of a challenging problem can be assessed and solutions discerned and derived. 

The first thing we'll do for you is listen. We need to understand your perspective and point of view on the challenges you face. Second, we become experts on your business model and your position in the marketplace. Thirdly, we provide value by providing the right solution that comports with your facts and unique circumstances. Finally, we don't fold up our consulting tent and walk away; instead we partner with you on the implementation of our proposed solution.

Faq

FAQs content

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