Policy Modeling

Flex target margins, markups, and rates and see the impact on entity margins, corporate and withholding tax, group ETR, and Pillar Two top-up tax.

Name

Settings

Reporting currencyInterest limit (% EBITDA)Credit withholding taxPillar Two in scopePillar Two yearFX EUR→USD

Entities

Name	Country	Ccy	Tax %	3P revenue	3P cost	Opex	Payroll	Tangibles	ALR margin % (Q1 / Med / Q3)

Intercompany flows

Type	Provider (earns)	Payer (pays)	Amount	Ccy	WHT % (override)

Solve a transfer price:sohits

Group results (USD)

Pre-tax profit408

Corporate tax82

Withholding tax24

Pillar Two top-up0

Total tax106

Group ETR25.9%

By entity

Entity	Ccy	Sales	Op. profit	Margin	ALR	Corp tax	Op. profit (USD)	Tax (USD)
US ParentUS	USD	1,000	220	22.0%	—	46	220	46
DE OpCoDE	EUR	500	110	22.0%	above	33	119	36
IP CoIE	EUR	114	64	56.2%	—	0	69	0

Pillar Two by jurisdiction

2025 substance carve-out: 9.6% payroll, 7.6% tangible assets. Top-up applies where a jurisdiction ETR is below 15%.

Jurisdiction	GloBE income	Covered tax	ETR	SBIE	Excess profit
US	220	46	21.0%	0	220
DE	119	36	30.0%	18	101
IE	69	24	34.7%	14	55

Risk flags 3

DE OpCo: margin above the arm's length range

Operating margin 22.0% sits above the benchmarked range. A year-end adjustment toward the median may be needed to support the position.

US: secondary adjustment regime

A primary transfer pricing adjustment could trigger a secondary adjustment. Deemed dividend or capital contribution; accounts may be conformed under Rev. Proc. 99-32

DE: secondary adjustment regime

A primary transfer pricing adjustment could trigger a secondary adjustment. Deemed dividend (verdeckte Gewinnausschüttung) possible

Sensitivity analysis

Sweep flowY axisTrack entity (ALR)Max amount

Pick a flow to sweep its amount and see how group tax, ETR, the Pillar Two threshold, and the arm's length range respond.

Tornado: swing in group total tax (each flow ±20%)

Directional model for planning only, not a tax computation or advice. Statutory rates, treaty withholding, and Pillar Two carve-out percentages are defaults to verify for the entity and year. Customs and VAT effects of price changes are not computed here.