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Larry Harding, founder and president of High Street Partners, says transfer pricing documentation varies by country, but typically includes:

• An overview of the business
• An analysis of legal and economic factors affecting the transfer pricing method selected
• A description of the company’s organizational structure
• A description of the transfer pricing method selected
• Reasons why the method was selected (a “best method” analysis)
• A description of alternative methods, and why they were not selected
• A description of all controlled transactions
• Any internal data used to analyze controlled transactions
• A description of comparables used, how comparability was evaluated, and any adjustments
• An explanation of the economic analysis and projections used to develop the pricing method
• Any material data discovered after the close of the tax year but before filing the tax return
• A general index of the principal and background documents
• A description of the record-keeping system.

Read more about transfer pricing rules here.

Read more about transfer pricing at Asia Pacific Forum.

A new trade settlement program could make it easier to trade RMB, observers say. Under the pilot program qualifying firms in Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan can use RMB settlement for cross-border trade with foreign companies.

“This is very significant in that it pushes the RMB to a fully-convertible currency,” said Zening Ge, president of SSA & Co.’s Asia division. “Yes, it will relax RMB regulations to some degree, but only for the current account, namely the trade-related areas. For capital accounts, there is still a long way to go. Therefore, the off-shore RMB settlement won’t change the nature of RMB to a closed currency.

“The big picture for the government to do this is to bring the RMB to the status of a regional currency,” Ge continued. “Of course, the ultimate goal is to challenge the status of the U.S. dollar. For multinationals that need to import into, and export from, China, this could much simplify their transactions by maintaining only one RMB account, and they can also get RMB-based trade financing, which could be settled later with RMB.”

Read more about this development at Asia Pacific Forum.

Executives planning to increase their overseas sales targets rose from 49 percent in 2008 to 56 percent in 2009, according to the HSBC 2009 U.S. Survey on International Business. For the majority of the respondents, markets such as China, India and Brazil are the most attractive.

More than half of the survey respondents have policies that involve both hedged and un-hedged risks, and 41 percent indicated they are managing foreign exchange risk more carefully.

Read more in the upcoming issue of Exchange magazine.

To address the growing ties between U.S. corporate treasury and business operations in China, AFP is proud to present a China Symposium at its Annual Conference. This track will help corporate treasury better understand the business and finance climate in China, and let them network with peers already doing business in the PRC.

Here are the three China Symposium sessions:

 
Treasury Trends in Asia:
Fresh Paths to Treasury Efficiencies in the Region

• October 5, 1:30 pm – 3:00 pm.
  Debra A. Hinds, Patrick P. Villers, Peter T. Tan and Ali Agha will discuss cash management in Asia. Hear the improvements these corporate treasury managers made while setting trends in regional treasury management in Asia.

Treasury Essentials for Doing Business in China:
An Intensive Presentation and Discussion

• October 6, 2:00 pm – 3:00 pm.
  Marc Monyek, Peter Sun and Stephen Green will provide a comprehensive overview of the fundamental issues and best practices for treasurers conducting business in China. They will present an overview of the Chinese economy, focusing on growth dynamics, as well as outline cross-border and trade regulatory issues.

Treasury Essentials for Doing Business in China:
An Intensive Presentation and Discussion Part 2

• October 6, 3:15 pm – 4:15 pm.
  Monyek, Sun and Green will discuss the nuts and bolts of banking in China, touching on wholesale banking, transaction banking capabilities, trade, and supply chain finance.

Copyright © 2009 | Association for Financial Professionals, Inc. | All rights reserved.

Circular 85, a recently released PRC tax initiative, is getting the attention of North American firms doing business in China. The measure, released in late April, promises more scrutiny for firms attempting to repatriate funds to America. Two approaches: (more…)

North American firms doing business in China must better integrate treasury and operations to gain more visibility into their cash position there. Dr. Zening Ge, president of SSA & Company Asia, a consulting and training firm, said firms used to lack proper systems and processes to understand their cash position in China, but that’s changed. (more…)