Restructuring (reorganisation) of related-party operations

within the meaning of transfer pricing regulations

as your company undergone, or is it planning, changes affecting:

The company’s organisational structure?
(e.g., mergers, demergers and acquisitions, share exchanges, disposals, or contributions of intangible assets)
The company’s operational activities?
(e.g., cessation of a significant function, assumption of new functions, transfer of loss-making operations, termination or substantial amendment of existing agreements)
The company’s assets?
(e.g., transfer of intangible assets or rights thereto, employee transfers, or sale-and-leaseback arrangements)

If so, a detailed analysis of these activities is required under the transfer pricing restructuring rules, particularly where such changes could materially affect the EBIT of any of the entities involved.

How can we help?

If the answer to any of the above is “Yes”, please contact us. We will review the transaction from a transfer pricing restructuring perspective, as it may:

require reporting in the TPR form,
give rise to an obligation to pay so-called exit fees.

Contact our experts>>

We provide comprehensive support on all aspects of restructuring under transfer pricing regulations. Depending on your needs, we can:

determine whether a transaction meets the definition of a transfer pricing restructuring, including assisting with calculations to assess changes in EBIT,
establish the level of exit fees, including preparing detailed transfer pricing analyses to support the level of restructuring charges,
assist with documentation and reporting obligations, including:
- preparing documentation justifying the restructuring process,
- preparing transfer pricing documentation for the restructuring,
- assisting with TPR reporting of the transaction.

Restructuring – selected experience

We specialise in reviewing the restructuring of related-party operations, particularly in relation to:

the transfer of specific functions, assets, or risks between related parties (e.g., contracts, people/teams/departments, client bases, losses, claims, IT systems, intangible assets, etc.),
significant changes in commercial or financial relationships, including the termination of existing agreements or amendments to their key terms.

We assess whether, as a result, the entity has been deprived of its profit-generating potential, or whether this potential has been reduced, and determine the tax implications of such actions under transfer pricing rules.

Where relevant, we also examine whether any restructuring-related remuneration (so-called exit fees) is payable.

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We encourage you to contact us to learn more about the tax implications of restructuring (reorganisation) and to ensure compliance with current transfer pricing regulations.