Fie-Insights from Project Management
Two Lakes Packaging Services V. Commissioner for Domestic Taxes: TAT Appeal No. 420 of 2021
Background The Appellant is a registered taxpayer whose principal business is grading and packaging of flowers for export. It is located in Naivasha Kenya. The Respondent is a principal officer of Kenya Revenue Authority, Kenya Revenue Authority is an agency established under the Kenya Revenue Authority Act for the collection of Government revenue and related...
Special Purpose Vehicle (SPV) Structure In PPPs & The Stakeholders Involved
Public Private Partnerships (PPPs) are always structured as Special Purpose Vehicles (SPVs) for reasons outlined in our previous article on the Fundamentals of PPPs. An SPV’s financial performance is analyzed on its own merit, it carries its own risks and it does not affect other investments made by the parties who have invested in it....
The Rudiments of Private Public Partnerships (PPPs)
In our previous thought leadership, we explored why developing economies in Africa should tap into private sector and sovereign funds to finance their Nationally Determined Contributions (NDCs). Development of climate resilient infrastructure will play a key role in climate risks mitigation and adaptation going into the future; hence there is a need to widen the...
Bank Reference Rates: Transition to LIBOR to SOFR & SONIA
Risk free rates (RFRs) represent the cost of borrowing that a borrower would incur without the lender taking into consideration the counterparty risk level of the borrower. They indicate the return that investors should get on zero risk investments and are used by the financial markets as a benchmark upon with risk premiums are added....
Bank Reference Rates: The LIBOR Rate Fixing Scandal
The LIBOR rate was believed to be a true reflection of the markets’ cost of borrowing funds independent of government interference. However, investigations by regulators and journalists after the financial crisis revealed that LIBOR had been manipulated by the banks themselves and at times from influence of regulators. Banks had an interest in keeping the...
Navigating Transfer Pricing Methods – Part 4
The Profit Split Method: it logically follows that the residual profits will be allocated to those entities contributing the unique and valuable intangibles and making the crucial strategic decision (entrepreneurs), while entities performing supporting functions will be allocated a small and stable (routine) remuneration. The aim is aligning profits with value contribution. It is useful...
Navigating Transfer Pricing Methods – Part 3
Transactional Profit Methods The Transactional Net Margin Method (TNMM): Net Margin data derived from uncontrolled transactions. TNMM examines the net profit relative to an appropriate base like costs (Net Profit return to Costs), sales (Net Profit return to Sales), or assets (Net Profit Return to Assets). It operates like a cost plus or resale minus,...
Navigating Transfer Pricing Methods – Part 2
The Cost-Plus Method (CPM): Gross profit margin data expressed as a mark-up of production costs incurred in uncontrolled transactions. OECD GL paragraph 2.45 states that cost plus method begins with the costs incurred by the supplier of property (or services) in a controlled transaction for property transferred or services provided to an associated purchaser. An...
Navigating Transfer Pricing Methods – Part 1
Most countries, the OECD and the United Nations transfer pricing guidelines have all built in a degree of flexibility into their approaches, allowing other methods to be used in specific cases, provided that they approximate an arm’s length result and are acceptable to all the parties involved – that is acceptable to the tax administration,...