Case studies | KPMG | CN

Case studies

Case studies

KPMG has prepared the following case studies as an introduction to the variety of services which GTPS offers.

KPMG has prepared the following case studies as an introduction to GTPS.

Consumer Markets

A multinational beverage giant, a global manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups, engaged KPMG to assist with transfer pricing advisory services.

  • We reviewed the risk assessment with respect to related-party transactions and deemed intra-company transactions, and helped execute the risk mitigation strategy.
  • We also prepared the Transfer Pricing (TP) documentation based on our understanding of the forthcoming changes in China's transfer pricing requirements of the to-be-issued China TP documentation regulations. The documentation supported the company in assessing and managing its TP-related risks.

A multinational retail group engaged KPMG to review related-party transactions and service agreements and provide contemporaneous documentation for the company.

  • The efficient preparation of TP documentation effectively enhanced the group's compliance with the PRC TP documentation requirements.

A multinational luxury and lifestyle company, one of the world's leaders in the design, manufacturing, and distribution of prescription frames and sunglasses in the premium and luxury segments, engaged KPMG to provide TP defence services.

  • We gathered information, produced TP defence strategies, and negotiated with the relevant tax authorities.
  • The conclusion of this transfer pricing project helped the company to minimise the transfer pricing adjustment and achieve a mutually agreeable solution for both the company and tax authorities.
 
 
Financial Services
 
A US-based multinational insurance group engaged KPMG to review and analyse its regional cost allocation and recharging policy within the Asia Pacific region. KPMG member firms in China and the US worked closely on the project to deliver a cost-efficient, consistent, and valuable result. The conclusion of this cost allocation project has helped the group to achieve a tax and Transfer Pricing (TP) structure that will be applicable to each related entity in the Group.
 
A US-based multinational credit card network group wished to optimise its investment and asset management consultancy services strategies and reduce unnecessary costs and risks associated with the provision of services from its Chinese affiliates. KPMG's Transfer Pricing team performed a planning study to identify a reasonable, tax efficient pricing structure and help the group implement the pricing policies. The opportunities identified by KPMG included pricing method, pricing mark-ups and other relevant tax considerations. This helped the company reduce potential transfer pricing risks.
 
 
 
Industrial & Automotive Markets
 
A diversified multinational giant engaged KPMG to assist in a cost allocation assessment for its Asia Pacific subsidiaries. We identified and evaluated the client's existing cost allocation methods and policies, highlighted potential transfer pricing issues and proposed several options to mitigate potential risks. KPMG member firms worldwide worked on the project to deliver a tax-efficient resolution.
 
The conclusion of this cost allocation project helped the Company minimise their transfer pricing adjustment risks.
 
A leading manufacturer of high-quality automobile parts, a leading player in the Asia-pacific region, engaged KPMG to assist in identifying potential transfer pricing risks and quantify potential PRC income tax implications. KPMG helped the client achieve its targeted goal of tax savings from a transfer pricing perspective for its global subsidiaries.
 
KPMG identified and quantified potential risks and recommended resolutions to help minimise the client's transfer pricing risks. KPMG also assisted the Group in implementing the recommended transfer pricing strategies.
 
 
 
Technology, Media & Telecommunications
 
A multinational IT giant engaged KPMG to assist in a transfer pricing defence.
 
KPMG helped prepare information required for reaching a settlement; identified and evaluated possible negotiation strategies; prepared responses to further enquires the Tax Bureau might raise; and met with the Tax Bureau to explain and discuss the transfer pricing policy on behalf of the Company. KPMG member firms in China and Hong Kong SAR worked closely on the project to deliver a tax-efficient resolution.
 
The conclusion of this transfer pricing project has helped the Company to minimise its transfer pricing adjustments and achieve a mutually agreeable solution for both the Company and tax authorities.
 
A multinational communication services group a leading player in Asia's information and communications technologies industry, engaged KPMG to assist in identifying potential transfer pricing risks; quantifying the potential material PRC income tax implications; formulating transfer pricing strategies, and preparing transfer pricing documentation.
 
KPMG identified and quantified potential risks and recommended corresponding resolutions to reduce transfer pricing risks. KPMG also assisted the Group in implementing the recommended transfer pricing strategies.
 
A US-based multinational semiconductor company that designs, manufactures and markets semiconductor products engaged KPMG to design transfer pricing options for the restructuring of its China operations and to comment on tax and transfer pricing issues in China and Hong Kong SAR.
 
KPMG member firms in China summarised the transfer pricing framework, identified potential tax outcomes, analysed the transfer pricing options and structured a tax-efficient transaction model.
 
The transfer pricing planning study on the new transaction model and pricing policies gave the client clear and effective guidance on how to proceed with their future operations in China. 
 
 
 
Others
 
An Australia-based construction company that generates its income from construction management and construction work in Australia, engaged KPMG to propose transfer pricing options for its new offshore sourcing office and to provide comments on tax and transfer pricing issues in Shanghai and Hong Kong. KPMG member firms in China and Australia worked closely to summarise the transfer pricing framework, design options and identify potential tax outcomes, as well as analysed the transfer pricing options and presented the tax and transfer pricing rules in Hong Kong and Shanghai. The feasibility study on transfer pricing options for the new offshore sourcing office gave the client clear and effective guidance on setting up a new operating entity in China.
 
A US-based real estate company that is actively acquiring real estate properties across China and generating its income from providing relevant property consultancy services engaged KPMG to assess its intra-group services charges to make sure that the methods used complied with Chinese transfer pricing regulations. KPMG's Transfer Pricing team in China helped the client mitigate its transfer pricing risk by finding an external comparable uncontrolled price ("CUP") and providing related documentation services. 

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