You are newly employed as the global Transfer pricing manager of a large U.S. multinational corporation with the global Head Office in New York. The corporation has a complex structure with subsidiaries in many countries. The US Parent, Parent Co, has the following wholly owned subsidiaries: - UK CO Newco Cayman Island - Brussel Co France Co Vietnam C South Korea Co The Parent Co and its wholly owned subsidiaries constitute As you start your job several challenges cross your desk that require your attention. a) The Group is a high technology company, which have developed unique navigation systems for airlines, ships & submarines. Currently the UK subsidiary, UK Co. is a licensor. All intellectual property rights are owned by the UK Co, but it will be closed permanently, and all rights will be transferred to Newco Cayman Island. The rights will be transferred at book value. Newco Cayman Island will invoice a 10% (of sales) royalty to the existing licensees in the Group b) UK Co and Vietnam Co have a legal dispute between them. The companies agree that the legal department in the UK will investigate the case in order to find a solution. By agreement, fifty percent of the legal cost will be invoiced from UK Co to Vietnam Co. The legal department in the UK is normally charging other entities in the group GBP 800 per hour. The legal department at Vietnam Co is normally charging GBP 50 per hour when they are doing legal work for other entities in the Group c) Brussels Co has established a manufacturing company in South Korea, South Korea Co. South Korea Co. built a large factory, which will support most of Far East with their products. The Head of Engineering and other employees working at the French subsidiary, France Co, have taken on a three years assignment in Korea in order to build up the factory. test and improve the production line, train and educate the employees, and get the company up and running c) Brussels Co has established a manufacturing company in South Korea, South Korea Co. South Korea Co. builta large factory, which will support most of Far East with their products. The Head of Engineering and other employees working at the French subsidiary, France Co, have taken on a three years assignment in Korea in order to build up the factory, test and improve the production line, train and educate the employees, and get the company up and running The CFO asks you to do the following for each scenario: (25 points cach.75 total) 1. You must write down the intercompany transaction or transactions which the scenario is concerned. 2. Describe the TP issue or matter that must be dealt with 3. After the TP issue is identified, you must describe your approach to solve or resolve the matter using Transfer Pricing principles. (keep it short) Finally, you have an audit matter headache: , d) The IRS is auditing your US intercompany transactions The IRS has been auditing for nearly a year and the statute is about to run. The IRS examiner has spoken with you about transfer pricing. However, his last comment was: "We will make an adjustment for 1 million USD, because we need to close this case. If you do not accept our adjustment, we will be on your neck for the next 5-7 years". What is your dispute resolution strategy to resolve the matter? (25pts) (keep it short and to the point)