It’s time to put what you’ve learned to the test, get 8 questions right to pass this week.
Q1.
Which statement about transfer pricing documentation is true?
Choose the correct answer.
A
The transfer pricing documentation can be prepared any time; there is no time requirement for this.
B
National governments can have different, additional, specific documentation requirements than the OECD requires.
C
It is optional to submit the local file/master file to the tax authorities.
D
The country-by-country report should be filed in one country but may not be shared with other tax authorities.
Q2.
What are some of the key transfer pricing compliance obligations and considerations that companies will need to take into account?
There are 3 correct answers.
A
Time requirements for submitting/preparing transfer pricing documentation
B
Setting up the intercompany prices in the company's system straight away and consulting the transfer pricing policy later
C
The materiality thresholds relating to the reporting of transactions
D
The requirement to retain documents for a certain period of time
E
Completing ad hoc reviews any time that is convenient for the team
Q3.
What does the "Integrated Data Sources" building block contain?
There are 2 correct answers.
A
Data models that can host sample data
B
Data models that connect to source systems for loading input data
C
Data models that contain configured calculation rules
D
Data models that can enrich input data
Q4.
Which of the following statements about calculation of profit and tax per legal entity are correct?
There are 2 correct answers.
A
Within a legal entity there may be transfer pricing functional segments that represent different transfer pricing models.
B
Profitability may be monitored at the level of a transfer pricing segment to be compared with a target operating margin.
C
Every legal entity has only one function.
D
Profitability monitoring is only relevant at the level of headquarter, and not for the legal entities as such.
Q5.
Which of the following are included in the 3-tiered approach to transfer pricing documentation?
There are 3 correct answers.
A
OECD TP Guidelines
B
Country by Country Reporting
C
Local File
D
Master File
E
BEPS Action 13
Q6.
Which functions are part of the "Reporting" step in the Operational Transfer Pricing content package?
There are 3 correct answers.
A
Result to be shown on
B
Result to be sent to other applications
C
Result to be sent to other data warehouse
D
Generate sales order in SAP S/4HANA based on previous results
E
Join transfer pricing results
Q7.
Which statement about the at arm's length principle (ALP) is true?
Choose the correct answer.
A
The ALP means multinationals are allowed to change their intercompany pricing as they wish.
B
The ALP allows the use of changing intercompany pricing to influence profits.
C
The ALP means setting intercompany pricing at a maximum level to achieve higher profits.
D
The ALP means multinationals are expected to apply terms and conditions on intercompany transactions in a way that would be applied by third parties.
Q8.
Which of the following statements about P&L segmentation are correct?
There are 2 correct answers.
A
An example approach could be a combination of direct, indirect, and manual allocations.
B
The transfer pricing model can be different for different transfer pricing segments.
C
Within the legal entity segments, transfer pricing models are always the same.
D
A segmented P&L is always prepared using only allocation keys.
Q9.
Which statements about profit level indicators is correct?
Choose the correct answer.
A
The operating profit margin (OM) is an allowed profit level indicator (PLI) under the transactional net margin method, which is an allowed method under the at arm's length principle.
B
The profit level indicator (PLI) is an operating profit margin (OM) that is allowed under the at arm's length principle.
C
The transactional net margin method (TNMM) is an allowed profit level indicator (PLI) under operating profit margin (OM), as part of the at arm's length principle.
D
The at arm's length principle is a principle under the profit level indicators (PLI) and allowed as a transactional net margin under the operating profit margin (OM).
Q10.
For which purposes should the Operational Transfer Pricing content package in SAP Profitability and Performance Management be used by tax and transfer pricing experts?