Cross-border Tax Talks

September 28, 2022

Reshaping US Transfer Pricing: Impact of Medtronic

Doug McHoney (PwC's International Tax Services Global Leader) welcomes first-time guest Kristina Novak (Washington National Tax Services Transfer Pricing Principal) and returning guest Alex Voloshko (PwC’s Value Chain Transformation Leader) to discuss the Medtronic case. They highlight the key takeaways including intellectual property considerations, transfer pricing trends, licensing models, business transformation trends for customers, and of course, a brief discussion of how Pillar Two will fit in.

Timestamps:

  • 2:45 - What are the basic facts and procedures related to the Medtronic case from a transfer pricing perspective?
  • 7:00 - How common is it for the court to apply an unspecified methodology? How should taxpayers think about this as it relates to traditional methodologies like a profit split, CPM, or CUT?
  • 7:50 - Is the unspecified method used in this case something that taxpayers can look to when determining their own methodologies?
  • 9:50 - What lessons and takeaways can advisors and taxpayers learn from this case?
  • 15:40 - What will licensing look like under Pillar Two and post-Medtronic?
  • 17:20 - What are we seeing with economic substance and the corroborating analysis in light of the Medtronic facts?
  • 19:10 - Not only in the US, but across the globe, fiscs are looking for more revenue. What trends are we seeing?
  • 21:20 - What are the trends from a controversy perspective?
  • 23:30 - In light of geopolitical changes and the pandemic, what recommendations from a transfer pricing perspective, particularly in light of the Medtronic case should taxpayers consider?
  • 31:20 - From a supply chain perspective, how does transfer pricing play a role in transformation?
  • 37:15 - In the area of digital transformation, one of the trends that we’re seeing is how important digital and technology is. What are some things that we should be mindful of, particularly in industries that haven’t traditionally used digital in their models?

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Speakers

Doug McHoney

International Tax Services Global Leader, PwC US

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Kristina Novak

Principal, Transfer Pricing, PwC US

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Doug McHoney

Doug McHoney

International Tax Services Global Leader, PwC US

Geoff Jacobi

Geoff Jacobi

ITS, Knowledge Management Managing Director, PwC US

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