What does enterprise AI actually look like in practice?

In this episode, Xiaofang and Paul speak with Candy Liu, Strategic Global Account Lead at Microsoft, about how large organisations are adopting AI in the real world.

From Microsoft Copilot and AI agents to hackathons, governance, and change management, Candy breaks down what works, what fails, and where businesses should start.

They discuss why AI adoption needs leadership support, how teams can use AI to improve productivity and reduce low-value admin, and why the best results come from focusing on high-impact use cases instead of trying to make everything “AI-first” at once.

The conversation also explores what smaller businesses can learn from enterprise teams, how finance and customer service functions are already benefiting from AI, and why the future of work will involve managing both human and digital resources.

A practical episode for anyone trying to use AI more effectively at work.

Paul Sutton talks to Robin Hart – a Principal in Charles River Associates’ Transfer Pricing Practice, based in the San Francisco Bay Area – about the current status of Amount B. With an expected start date of 1 January 2025, and many important factors still unclear, it is a very significant challenge for many multinationals.

Paul and Robin’s discussion covers:

• A recap of what Amount B is intended to achieve, and progress so far
• A summary of the current situation
• What we know at this time, and some very significant questions that are still unanswered
• The incentives for some countries not to adopt Amount B, and some of the practical consequences that might result
• How multinationals should already be preparing
• Some of the challenges for multinationals in implementing Amount B
• Possible longer-term developments, including the Amount B approach being extended to other transaction types
• Key takeaways for MNEs who are affected by these issues.

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Target Margin is a frequently used transfer pricing model, and one which particularly lends itself to limited risk distribution arrangements. LCN co-founder Paul Sutton discusses the implications in detail.

• When Target Margin arrangements are most likely to be suitable
• The two main options when drafting the pricing clause of the ICA, and how to choose which one to use
• The importance of looking at the transaction from both a TP perspective and a legal one, and then reconciling the two
• Common mistakes, and how to avoid them

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In 2022, the UK Upper Tribunal’s judgment in HMRC v BlackRock sparked a lot of comment – and not a little consternation – around the transfer pricing community. LCN co-founder Paul Sutton discusses the implications in detail.

• How the case changes things, and how it doesn’t
• How the Upper Tribunal’s position differed from the previous First-tier Tribunal judgment
• The most important implications for MNEs and their transfer pricing advisers.

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Paul Sutton talks to Spencer Ho from RoyaltyStat, which recently became part of Exactera. RoyaltyStat is an industry-leading online database of royalty rates extracted from license agreements and interactive transfer pricing analytics.

Paul and Spencer discuss a range of issues around intra-group franchising arrangements, including:

• a high-level perspective on how franchises work as between unconnected third parties
• the key documents involved
• the key elements of the financial arrangements
• what information is available for the benchmarking of intra-group franchise arrangements
• what factors transfer pricing practitioners should consider, in addition to the headline royalty rates.

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Paul Sutton looks at the German Finance Ministry’s June 2023 update to its Administrative Principles on Transfer Pricing. The new version confirms some fundamental points that multinationals and transfer pricing professionals need to be aware of. Perhaps the most important is a very clear and specific position regarding ex ante price setting, and the need for intercompany agreements to be implemented in advance, not after the event.

Germany’s 2023 update to its Administrative Principles on transfer pricing confirm that the key point in time for the application of the arm’s length principle is the date of conclusion of the relevant intercompany agreement, not the date on which the relevant transaction is performed.

This is a crucial distinction, and of course presupposes that appropriate intercompany agreements have been put in place on an ex ante or price setting basis. Although this approach is consistent with the OECD Transfer Pricing Guidelines, it reflects a much clearer and more specific expression of the concept of risk allocation, price setting and the ‘playing out’ of risks and contractually delineated transactions.

Clearly this has big implications for MNEs who are active in Germany, as it’s simply impractical to take one approach there and a completely different one in other territories. Paul Sutton looks at both the technical aspects and what it means in practice.

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Paul Sutton talks to Mark Supperstone, Managing Partner of the corporate restructuring specialists Resolve, about how an office-holder in a formal corporate restructuring process involving a UK entity would look at related party transactions in the period leading up to the restructuring.

They also consider what implications this has for group structures, and what practical steps legal entity directors can take to protect their position and reduce the risk of personal liability.

Applying the arm’s length principle to intercompany transactions within a multinational group can sometimes appear to be a theoretical exercise. But if individual entities or the group as a whole experience financial distress, related party transactions are likely to be subject to scrutiny in a much more pointed way.

Office holders in formal insolvency proceedings may be under a statutory duty to investigate the conduct of legal entity directors in the months and years leading up to the insolvency, and directors may be exposed to personal liability or disqualification if they are unable to account for their decisions.

Paul Sutton and Mark Supperstone discuss this scenario from the perspective of UK entities in financial distress, and consider key questions such as:

• The key legal duties of an administrator in a formal administration process
• The first steps which an administrator would be likely to take on taking office
• The statutory duty on officeholders to investigate the conduct of directors
• How an administrator or liquidator would be likely to view transactions between the company in liquidation, and other members of the group
• Key duties of legal entity directors, and the circumstances in which they may become personally liable
• The practical steps which legal entity directors can take to minimise their exposure to personal liability
• The importance of addressing a potential situation before it develops, and getting informal advice at an early stage.

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An in-depth discussion by Paul Sutton and Melbourne-based tax disputes specialist Andy Bubb. They look at three cases that are currently ongoing in Australia: Pepsi, Singtel and Mylan. For each case, they:

• Review the current progress of the litigation
• Analyse the specific issues in question
• Identify key learning points for transfer pricing professionals.

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