Pre-CAP and CAP Application Form

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Overview

Application-PY
1st Quarter

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Sheet 1: Application-PY

Material Inter-Company Transactions Template

Application Prior FY 20XX: Actual Tax Filing

a

b

c

d

e

f

g

h

i

j

k

l

m

n

o

p

q

r

s

t

u

v

w

CC Payor

CC Payee

Treaty

Sub F

BEAT

Transaction

TPS Sect Ref

APA

Form

Amt Reported for Tax Purposes ('000)

Form Line #

Sch M Col

Transfer Pricing Policy

Transfer Pricing Method

Tested Party

Tested Party Function

Tested Party OM

PLI/Rate

Benchmark Range Up Med Low

Actual Results (2018)

Change

IN

US

Yes

No

No

Fsub1 license of trademarks & know-how from US Parent

A1

N

A

$123,450

15

b

Royalty rate = 2% of net sales

CUT

N/A

N/A

N/A

Royalty on Sales

4.3%

3.4%

2.0%

Royalty rate=2.1%

No

FR

US

Yes

No

No

US Sub2 license of trademarks & know-how to Fsub2

B2

N

A

$12,500

5

b

Royalty rate = 1% of net sales

Internal CUT

N/A

N/A

N/A

Royalty on Sales

3.7%

1.7%

1.1%

Royalty rate=1%

No

AS

US

Yes

No

No

US Sub1 Inc manufactured product sales to Fsub3

C3

N

A

$1,234

13

c

Cost plus 10% Mark-up

CPM (3-yr)

Fsub3

Distribute

3.2%

MUTC

17.8%

9.4%

6.1%

Mark-up = 12.3%

No

CA

US

Yes

No

No

US Sub 2 Inc provision of IT Services to Fsub4

D4

N

C

$1,001

18

c

Cost with NO Mark-up

Services Cost Method (SCM)

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Cost

No

US

SN

Yes

No

Yes

Fsub5 provision of R&D Services to US Sub3 Inc.

D5

N

B

($11,020)

6

c

Cost plus 15% Mark-up

CPM (3-yr)

Fsub5

Service

4.0%

MUTC

17.8%

12.4%

8.1%

Mark-up = 16.1%

No

AS

DE

Yes

Yes

No

Fsub6 manufactured product sales to Fsub7

C3

N

B

$22,010

13

c

Cost plus 10% Mark-up

CPM (3-yr)

Fsub7

Manufacture

2.5%

MUTC

15.8%

9.1%

6.2%

Mark-up = 10.3%

No

CA

US

Yes

No

No

US Parent Inc Provision of Mgmt Services to Fsub8

E4

Y

B

$7,473

18

b

Cost plus 5% Mark-up

CPM (3-yr)

Fsub3

Distribute

2.2%

MUTC

12.2%

5.8%

2.9%

Mark-up = 3.3%

No

UK

US

Yes

No

No

US Sub1 Inc manufactured product sales to Fsub9

C7

N

D

$1,244

13

c

Cost plus 10% Mark-up

CPM (3-yr)

Fsub9

Distribute

2.5%

ROA

4.2%

3.0%

2.2%

ROA = 3.08%

Yes

CA

US

Yes

No

No

Interest paid by Fsub8 on $7.7b loan from US Sub2 Inc

G7

N

A

$100,000

22

c

1.3% interest

Credit Rating + Bond Interest Rate

N/A

N/A

N/A

Interest rate

2.5%

2.2%

1.1%

1.29% Interest

No

US

LX

Yes

No

Yes

Interest paid by US Sub3 Inc on $3.174b loan from Fsub10

G8

N

A

($200,000)

10

c

6.3% interest

Credit Rating + Bond Interest Rate

N/A

N/A

N/A

Interest rate

7.5%

6.2%

4.1%

6.3% Interest

No

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Sheet 2: 1st Quarter

Material Inter-Company Transactions Template

1st Quarter FY 20XX

CC Payor

CC Payee

Treaty

Sub F

BEAT

Transaction

APA

PY Amt Reported ('000) Form 5471/8865 Sch M or Form 5472

Q1 Amount ('000)

Transfer Pricing Policy

Transfer Pricing Method

Tested Party

Tested Party Function

Tested Party OM

PLI/Rate

Benchmark Range Up Med Low

Change

CJ

US

No

No

No

Interest paid by US Sub1 Inc on loan of $250m to FSub1

N

N/A

$437

.7% interest

Credit Rating + Bond Interest Rate

N/A

N/A

N/A

Interest rate

2.5%

2.2%

1.1%

New

FR

US

Yes

No

No

US Sub2 license of trademarks & know-how to FSub2

N

N/A

$150,000

Royalty rate = 1% of net sales

Internal CUT

N/A

N/A

N/A

N/A

3.7%

1.7%

1.1%

New

SN

US

No

No

No

US Sub3 Platform Contribution Transaction (PCT) $1.05b to FSub3

N

N/A

$1,050,000

See Cost Sharing Agreement (CSA)

Acq Price Method with 30% Discount

N/A

N/A

N/A

N/A

N/A

N/A

N/A

New