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.

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.

The CFO asks you to do the following:

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)