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Transfer pricing energy and resources in 2019

In conjunction with International Tax Review, Deloitte Touche Tohmatsu is pleased to present the 2019 Transfer Pricing Energy and Resources guide, a collection of industry thought papers produced by Deloitte member firm transfer pricing (TP) professionals in the energy and resources (E&R) industry.

The E&R industry is truly global, spanning different types of transactions ranging from commodity trades to finance, services, and royalty-based payments. One of the key challenges the industry faces is addressing the breadth of tax, TP and investment issues specific to it.

In this guide, we begin with a primer on the E&R industry, which includes an overview of the E&R supply chain, an introduction to TP fundamentals, and a discussion of TP issues specific to the E&R industry to broaden the general knowledge base of international tax professionals and others interested in this dynamic industry.

Then, we turn our attention to various TP issues and challenges related to the industry at a regional- and jurisdiction-specific level. We begin with an article that focuses on the TP issues in Southeast Asia, a key destination market for many commodities. We then address the recent emergence of TP rules in the Middle East region.

We also include focused articles that provide an overview of recent TP developments in selected countries that have a significant or expanding presence in today's E&R industry. These include a review of the application of the comparable uncontrolled price (CUP) method in Russia, cost-plus versus cost-applied pricing to the E&R sector in India, a Canadian perspective on pricing hydrocarbon commodities, and a review of Australia's guidance on centralised E&R operating models.

We conclude our guide with three articles that provide an overview of some increasingly popular TP approaches. These include an article on asset-backed trading models and a review of the application of the profit-split method in light of the OECD's June 2018 guidance. We conclude with some commentary on centralised commodity trading hubs in the post-BEPS environment.

Given the complexity and variety of tax issues within this industry, this guide should be the starting point rather than the finish line for all your E&R industry-related TP and tax inquiries.

We hope you find our publication interesting and, more importantly, of practical use, and we invite you to contact our leading team of professionals or your local Deloitte contact if you have any questions.

Deloitte global energy and resources transfer pricing team

Aengus Barry

Deloitte UK

Tel: +44 20 7007 4331

Aengus Barry joined Deloitte UK's transfer pricing team 16 years ago and since that time has spent a significant portion of his career assisting clients in the energy and resources industry. He has particular experience in complex energy and resources pricing projects, from using risk pricing statistical techniques to support the marketing margins retained by mining groups to one of our most difficult diversionary LNG cargo pricing assignments. Aengus has experience delivering a broad range of TP services, from documentation and compliance reports to IP planning exercises and debt pricing projects. He has worked on a number of APAs and also has experience of wider international tax issues through participation in several tax structuring projects. Aengus holds both bachelors and masters degrees in economics. He is a CFA charter holder and was awarded the ATT qualification.

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