110TE TO MR S P CRALFEN
nw: T D Bilton
DATE: 11 September 1991
REF: XS 168
an rMANWAL NUIRAWN
Further to our recent conversation, I sumimarise below the latest
position in connection with the above.
The alternative funding basis for R & D aimed to seximist recovery
from no&-UK companies. subject to the constraints of inter-company
pricing and attitudes from the various tax authorities, The best way
of allocating costs an the basis of perceived benefits was found to
be by reference to net external turnover. The allocations for 1991
thus came out as follows:-
9000
BATCo 1,403 36.1 (32)
B L W 1,552 39.9 (3D)
SAYCIF 460 11.9 (19)
INASOCP 470 12.1 (19)
3.685
ummax
The figures alongside in pw those* show the allocation for earlier
Yom which was purely an the basis of a percentage allocation.
UTC* and DIN bath agreed the principle of the allocation, confirming
that the now method would not came any problems with the tax
authorities. Sizoe RATCF gained from the formla it has been assumed
that they will not object. Gerammy will not allow any form of profit
uplift so no attempt has been zede to increase their allocation
bey that based on met turnover.
Imseco, agreed that the basic formula should be on the basis of met
tormova (sm in the came of Germany. Imesco gained from the revised
method). In addition. they also indicated that they would be
pt apez to accept a profit uplift. Rowever, following further
consideration at Windsor Rouse. it was decided not to apply different
bases to different companies. The charge was therefore confirmed on
the basis of net turnover.
Plesse let w Itnew if you require anything further.
Aig
TDB:sr:ufbbu
LA
NO
X1.
ELA.T IMMXTRIES P.LC. - MINNESOTA Doosffm COPY - PR=cED PURSUANT To VILD. OF
CONSENT JUDGMENT DATED S/SM IN SrATE OF A*NNEsoTA, Er AL V. PHIP A00FIRIS. ET CASE No. C14M-0565