Tag: Headcount splitting factor

Allocation key used in intra-group cost-sharing arrangements that distributes shared service costs among group entities based on employee headcounts. Tax authorities challenge whether headcount accurately reflects benefit received, particularly where entities perform activities of differing complexity or value.

Kenya vs ECP Kenya Limited, November 2023, Tax Appeals Tribunal, (Appeal 614 of 2022) - [2023] KETAT 944 (KLR)

Kenya vs ECP Kenya Limited, November 2023, Tax Appeals Tribunal, (Appeal 614 of 2022) – [2023] KETAT 944 (KLR)

/ Comparability Analysis, Delineation - Substance over Form, Services and Fees, Transfer Pricing Methods, Actual conduct, Cost plus method, DEMPE functions, FAR analysis, Headcount splitting factor, Highly integrated, Highly integrated activities, Investment fund, Most appropriate method (MAM), OECD Transfer Pricing Guidelines, Other splitting factors, Profit split method (PSM), Profit splitting factors, Splitting factors
ECP Kenya Limited charged a cost-plus mark-up for data and analysis services to its associated entity ECP Manager LP, arguing its role was routine support. The Kenya Revenue Authority rejected this characterisation, citing the Managing Director's involvement in investment decisions, and applied a profit split method instead. The Tax Appeals Tribunal dismissed ECP Kenya's appeal and upheld the authority's assessment in November 2023 ... Read more

Kenya vs ECP Kenya Limited, November 2023, Tax Appeals Tribunal, (Appeal 614 of 2022) – [2023] KETAT 944 (KLR)

/ Comparability Analysis, Delineation - Substance over Form, Transfer Pricing Methods, Actual conduct, Cost plus method, DEMPE functions, FAR analysis, Headcount splitting factor, Highly integrated, Highly integrated activities, Investment fund, Most appropriate method (MAM), OECD Transfer Pricing Guidelines, Other splitting factors, Profit split method (PSM), Profit splitting factors, Splitting factors
ECP Kenya Limited charged a cost-plus mark-up for data and analysis services to its associated entity ECP Manager LP, arguing its role was routine support. The Kenya Revenue Authority rejected this characterisation, citing the Managing Director's involvement in investment decisions, and applied a profit split method instead. The Tax Appeals Tribunal dismissed ECP Kenya's appeal and upheld the authority's assessment in November 2023 ... Read more