Global Transfer Pricing Conference

Transcription

1 Global Transfer Pricing Conference Does data have (intangible) value? October 2016 The new normal full TransParency

2 Today s presenters Gaby Bes The Netherlands John Steveni UK PwC 2

3 Today s world of data

4 Online world USD 750mln Daily 75 mln users 13 employees WhatsApp was acquired by Facebook for $19 billion (that s roughly 1/3 the market cap of Ford Motor Company). For those who are baffled by the size of the deal, look at the number that matters: as of December 2013, WhatsApp had over 400 million active users per month (the population of the United States is roughly 313 million) But data is transforming the more traditional industries as well PwC 4

5 Simplified data chain Customers/ communities/ external data Third parties? Customer facing entity Strategic decision making Data is collected Use in business/ license out/sell to third party Instructs which data should be collected Data is stored Insight is created Instructs analytics team Servers/ data centre and cloud Data is analysed Algorithms Data analytics PwC 5

6 Value of Algorithm Data is the raw material of the algorithm Ownership of Algorithm Data Cost incurred for development Smart algorithm Porter s barrier to entry Algorithm Data Text goes Raw here material goes here. Algorithm Text goes Conversion here. Improved data Text goes (Semi) here Finished goes good PwC 6 here.

7 Is Data like a Cash-pool or a procurement function? Data aggregator Data contributor Data contributor Data contributor If important group synergies exist and can be attributed to deliberate concerted group actions, the benefits of such synergies should generally be shared by members of the group in proportion to their contribution to the creation of the synergy. For example, where members of the group take deliberate concerted actions to consolidate purchasing activities to take advantage of economies of scale resulting from high volume purchasing, the benefits of those large scale purchasing synergies, if any exist after an appropriate reward to the party co-ordinating the purchasing activities, should typically be shared by the members of the group in proportion to their purchase volumes. PwC 7

8 A value allocation? EBIT 15% Routine remunerations 4% Royalties 5% Residual 6% Say residual 3% entrepreneurship, could you split remaining 3% over Group of countries? Local data providers / Local Users Total providers/total Users PwC 8

9 Data server Ownership Access Location Smart or not Transaction handling BEPS Action 7: A smart Server a PE? Which data is stored The decisive criterion is whether or not the activity of the fixed place of business in itself forms an essential and significant part of the activity of the enterprise as a whole. PwC 9

10 Taking action Do you know the data analytics initiatives at your company? Who controls acces to the data and owns the servers data is stored on? Does data have any value somewhere in your company? Have you thought about any of the tax aspects of data? Do your existing legal agreements cover data? PwC 10

11 What did you think? At the end of the session, tap Session Survey and provide your rating on any or all survey questions. Tap submit response. PwC 11

12 Thank you This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details. Design services 30335_PRES_09/16