Multinationals increasingly risk transfer pricing audits as tax authorities globally intensify their scrutiny of transfer pricing issues to claim their share of the tax revenues. Transfer pricing inquiries can be costly, and an unfavorable outcome can lead to tax adjustments, penalties, and interest charges. Transfer Pricing Audits can be time-consuming and involve a commitment of resources in assembling paperwork, preparing responses to detailed inquiries, and corresponding and negotiating with tax authorities.
How KPMG can help
KPMG’s GTPS practice has significant experience in responding to tax-authority challenges. We can assist you in determining an effective strategy for responding to such challenges, provide robust economic analysis in support of your existing transfer prices, help you prepare strong responses to detailed inquiries, and support you in negotiations with tax authorities.
In our experience, challenges usually begin with requests for additional information. Our GTPS professionals can advise you on how best to respond to initial information requests to satisfy the inquiry and limit the scope of the tax authority’s review.
Our team of dispute resolution professionals include:
- Former tax-authority officers with detailed knowledge and experience regarding the approaches taken by tax authorities
- Tax professionals with a sound grasp of local legislation, including statutory limitations on tax authorities to request information, and experience with tax audits
- Economists who analyze the arm’s length nature of the transfer prices in question.
Where the transfer pricing issues are more complex and tax authority inquiries more detailed, we can assist you through the stages of the transfer pricing audit.