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 Co

South Korea Co

The Parent Co and its wholly owned subsidiaries constitute the Multinational Group.

As you start your job several challenges cross your desk that require your attention.

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.

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)