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Corporate Tax Fundamentals Series: Earnings & Profits and Transfer Pricing

February 21, 2019

Corporate Tax Fundamentals Pittsburgh
Kimpton Hotel Monaco
620 William Penn Place
Pittsburgh, PA 15219

GTM introduces the Corporate Tax Fundamentals Series – a series of quarterly, 2-hour events designed to educate junior professionals on your tax team, and act as a refresher for senior level tax professionals.

The training program is being successfully executed internally at GTM to prepare our professionals for leadership positions and achieve long-term retention of technically savvy tax personnel. We now deliver the program to you in a format that is practical, timely, and adaptable to deepen the tax knowledge of your team without disrupting your department for an entire day.

Please join us on March 14th for breakfast, networking, 2 CPE creditsand a comprehensive education on the topics of Earning & Profits and Transfer Pricing.

Here’s what you will learn:

Session 1: Understanding and Computing E&P and its interaction with Taxable Income (E&P 101)

Although the term “earnings and profits” (E&P) is common in the area of international tax, often it is misunderstood, miscalculated, or worse, sometimes ignored. The importance of E&P should not be underestimated. E&P is the foundation for the cross-border income inclusion regimes that apply to controlled foreign corporations (CFCs) and passive foreign investment companies, (PFICs). U.S. tax reform has added Global Intangible Low-Taxed Income (“GILTI”) which is required to be calculated based on taxable income concepts rather than E&P. This session will introduce you to the concept of E&P — it’s categories, computations, rules, and reporting and the interaction with Taxable Income for GILTI purposes. Specifically, we will cover:

  • The Concept of Earnings and Profits
  • Principal Categories of Earnings and Profits
  • Computation of Earnings and Profits
    • Determine Taxable income
    • Adjustments to Taxable Income to Determine Earnings and Profits
    • Adjustments to Earnings and Profits to More Accurately Reflect Economic Gain or Loss
    • Other Transactions and Miscellaneous Adjustments
    • Accumulated Earnings and Profits
    • Ordering (Sourcing) of Distributions
  • Section 338 election
  • Nimble dividend rule
  • Hovering Deficit rule
  • Review overlap rules of taxable income and E&P to specific provisions (GILTI, Sec. 952, etc.)
  • Reporting and compliance review

Session 2: Introduction to Transfer Pricing (TP 101)

Transfer pricing refers to the pricing of transactions between entities under common ownership or control. Faced with U.S. tax reformBEPS, and an ever-evolving regulatory climate across the globe, now more than ever, companies must ensure their international and domestic transfer pricing for cross-border transactions withstand the scrutiny of various tax authorities. Join this session where we will provide a foundational overview of transfer pricing, including the conceptual framework and specified transfer pricing methods. Specifically, we will cover:

  • Definition of transfer pricing and the impact on companies
  • Conceptual framework
    • Control
    • Arm’s length standard
    • Best method rule
    • Comparability
    • Arm’s length range
  • Transfer pricing methods for
    • Tangibles
    • Services
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