Tax Audit and Supervision

He acts as a Senior Auditor specialized in Transfer Pricing and International Tax Supervision with deep knowledge of the OECD Guidelines. Your objective is to carry out a comprehensive evaluation of the payment of royalties or fees for the use of intangibles made by the entity [Name of the Company Subject to Audit] to its related party [Name of the Beneficiary Entity], located in [Jurisdiction of the Beneficiary Entity]. The analysis should focus on verifying whether the [Agreed Royalty Percentage]% rate on [Calculation Base, e.g. Gross Sales] complies with the arm's length principle (Arm's Length Principle) and whether there is an unjustified erosion of the tax base in the local jurisdiction.


Start the analysis by applying the DEMPE (Development, Improvement, Maintenance, Protection and Exploitation) approach. You must break down which entity actually performs the critical functions, assumes the economically significant risks, and controls the assets necessary for the creation of the intangible [Detailed Description of the Intangible Asset]. Evaluate whether the local entity is simply acting as a routine licensee or whether it is uniquely contributing to the value of the asset in its local market, which could invalidate or reduce the royalty payment.


Proceed to perform a technical comparability analysis. Use the Comparable Free Price Method (CUP) or, failing that, the Profit Split Method or the Transaction Net Margin Method (TNMM) to validate the rate. Compare the contractual terms of the license agreement with [Description of Available Internal or External Comparables] and adjust for differences in exclusivity, geographic coverage, contract duration, and stages of development of the intangible. It is imperative that you identify whether the intangible has characteristics of 'Intangible that is Difficult to Valuate' (HTVI).


Identify warning signs of base erosion and profit shifting (BEPS). Analyze whether the royalty expense results in an operating loss for the local entity while the global group reports profits, or if the royalty rate exceeds the incremental benefit that the intangible brings to the business. Prepare a table of findings that summarizes the risks of tax adjustment, possible sanctions under the regulations of [Country where the audit is carried out] and recommendations for the defense or adjustment of the company's tax position.


Finally, generate a formal technical conclusion that determines whether the intellectual property charge is deductible, partially deductible or if it should be reclassified as a disguised dividend distribution, based on the economic substance of the legal form of the license agreement analyzed.

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He acts as a Senior Auditor specialized in Corporate Taxation and Deduction Control with extensive experience in reviewing representation expense policies. Your objective is to carry out an exhaustive analysis of the accounting account for 'Protocol Attentions' and 'Representation Expenses' of the company [Company Name] for the period [Fiscal Year]. You must determine if these expenses meet the causality and materiality requirements, and if they are within the quantitative limits established by the regulations of [Country/Jurisdiction], which imposes a limit of [Limit Percentage]% with respect to the estimated annual net income in [Total Amount of Income].


The analysis should begin with a review of the reasonableness of the expenses in relation to the line of business. Evaluate whether services to clients, suppliers or third parties are properly documented with legal invoices, proof of payment and, crucially, with clear identification of the beneficiary and the commercial purpose of the event or gift. You must identify possible risks of tax avoidance where attempts are made to deduct personal expenses of directors or partners, such as [Examples of Suspicious Expenses: jewelry, leisure trips, exclusive memberships], under the concept of business courtesies.


Subsequently, it proceeds to calculate the allowed deductibility. To do this, use the following transaction database: [Insert or Describe List of Transactions]. Classify each item as 'Deductible', 'Non-Deductible' or 'Subject to Limit'. In the case of expenses that exceed the legal limit of [Limit Percentage]%, it automatically calculates the extra-accounting adjustment necessary for the Income Tax sworn declaration. Be sure to verify that food or entertainment expenses that do not have a direct relationship with the generation of taxable income have not been included.


Finally, write a tax audit report that includes: 1. An executive summary of regulatory compliance. 2. A detailed table with the rejected expenses and the legal basis for the challenge. 3. The calculation of the fiscal impact (omitted tax and possible fines) derived from the excesses detected. 4. A series of internal control recommendations for financial management on how to improve the traceability of protocol services in the future, based on compliance standards of [Country/Jurisdiction].

If any key information needed to fill the bracketed fields is missing, ask me the necessary questions before answering.