Transfer pricing, or the pricing of transactions between affiliates in different tax jurisdictions—also known as intercompany pricing—presents both tax opportunities and financial reporting risks for multinational businesses.
Tax authorities place a heightened focus on transfer pricing to increase revenue, leading to a rise in transfer pricing audits and penalties imposed.
Proactively enacting transfer pricing procedures while working toward compliance can help your business avoid costly audits and lower your worldwide effective tax rate—so you can stay focused on its international growth.
All cross-border related party transactions are subject to scrutiny, whether your company has operated subsidiaries in multiple countries for years or you’re setting up your first foreign outpost.
Transactions susceptible to transfer pricing can include:
Understanding the tax consequences of your transfer pricing decisions can help you comply with tax laws, avoid costly audits, and enhance your tax position.
Our team has the expertise to assist with complex valuations of intangible property, advance pricing agreements and mutual agreement procedures, accuracy-related penalty protection, Organisation for Economic Co-operation and Development (OECD) base erosion and profit-sharing (BEPS) Action 13, and mergers and acquisitions (M&A) due diligence.
We can also assist with studies of less common, often domestic, transfer pricing arrangements such as the arm’s length pricing of treatment charges within a mining operation and stumpage of standing timber. We have experience assisting with pricing between real estate investment trusts (REITs) and taxable REIT subsidiaries, with pricing loan guarantees, and with structuring and determining arm’s length interest rates in cash pool arrangements.
Effective transfer pricing documentation can support your company’s intercompany arrangements with:
We can assist you in preparing accuracy-related penalty protection documentation; OECD reports, including master files and local files; and foreign transfer pricing documentation through:
Transfer pricing planning can take place during any stage of a company’s life cycle.
Whether your company is expanding internationally, enhancing your international supply chain, or migrating intangible property, effective transfer pricing planning is critical to reduce your effective tax rate while remaining in compliance with tax jurisdictions around the world.
We have deep experience in transfer pricing valuations of intangible property, economic benchmarking, and tax planning strategies in response to various compliance and regulatory changes, including:
Proactive planning can also help set up financing arrangements like intercompany loans and cash pools to meet transfer pricing requirements.
Reserving for uncertain tax positions related to transfer pricing can have a material impact to your company, particularly when a transfer of intangible property occurs.
Transfer pricing should also be a consideration during the tax provision when your company has intercompany arrangements related to base erosion and anti-abuse tax (BEAT) and foreign derived intangible income (FDII).
We can assist in determining if a reserve is needed for your company’s transfer pricing policies and what the magnitude of that reserve should be through:
Transfer pricing due diligence is often overlooked in the context of M&As. Often the target may be unfamiliar with transfer pricing and the risk posed due to a lack of transfer pricing policies and documentation. This is particularly true of companies early in their life cycle.
We can help you:
Tax authorities around the world have increased their audit efforts in recent years. No matter how tight your transfer pricing policies and documentation may seem, there’s a possibility that a tax authority will assert adjustments and potentially add penalties. We have deep experience in assisting clients to navigate transfer pricing audits.
We can provide supplementary economic studies and documentation while assisting you in responding to the tax authorities’ questions and information document requests with:
Confidently navigate your transfer pricing strategies with guidance from our professionals each step of the way.
Working closely with your business leaders, our professionals provide a customized road map to effectively overcome tax challenges specific to your business.
We guide clients at all stages of the company life cycle, from early startup to publicly traded Fortune 100 companies.
Through our vast experience in advising middle-market companies, we can help you understand the practical applications of transfer pricing and how to implement the mechanics of arm’s length benchmarking—so you experience a seamless transition between tax, financial planning and analysis, and operations.
Our membership in Praxity, AISBL—a global alliance of independent accounting firms—also keeps us connected with like-minded firms across the globe who can help provide local, international insight into all sides of transfer pricing challenges.
Thank you. Your contact request has been received. We will be in touch soon.