Borders may seem unimportant to multinational organizations, but national governments don’t see things quite the same way.
Instead, fiscal authorities in countries around the world are shoring up their national tax bases with increasing vigour by strengthening local legislation and imposing higher transfer pricing documentation requirements and penalties for non-compliance.
Multinationals must comply with local rules that vary widely while also interpreting model rules set out by the Organisation for Economic Co-operation and Development (OECD). They must be able to present cogent arguments that support transfer pricing decisions, are substantiated by thorough, authoritative analysis, and that take into consideration local country rules governing their transactions.
To meet all of these requirements, your multinational business should consider an effective global approach to transfer pricing that encompasses arm's-length pricing, not just for tangible goods, but also for services and transfers of intangible assets, group financing, and other key areas.
Some forward-looking businesses also turn their transfer pricing policies into strategic tools for investment and supply chain decisions, as well as for global tax planning. Ideally, you should be thinking about this issue well before any goods are shipped or services provided outside Canada, or any transactions occur.
The multidisciplinary team of economists, tax practitioners, lawyers, and financial analysts that comprise our Transfer Pricing Services practice do more than simply help your business comply with national transfer pricing rules. They take a larger view and look beyond the present to help you establish policies to that can make your transfer pricing commercially viable and tax-efficient.
Although transfer pricing issues are inherently global, it is almost impossible to formulate a tax-efficient, commercially viable global strategy without local knowledge. Our Transfer Pricing practice operates in every region of the world to assist with your transfer pricing needs wherever your company does business. Our professionals provide a combination of local knowledge, experience, global analysis, and coordination to multinationals that can help them see beyond borders and manage their transfer pricing tax-efficiently.
A multidisciplinary approach takes into account all aspects of Transfer Pricing:
Does your company have commercially sensible and fiscally viable transfer pricing policies? If not, it’s important to work with a firm that understands them and can help you develop and later modify them as new rules or circumstances require.
To comply with local fiscal requirements, you should design transfer pricing policies and procedures, and prepare documentation for a strong first-line of defence against fiscal authority audits. You can do this with KPMG’s Interpreter®, our advanced, Web-based transfer pricing technology.
When tax disputes arise, it’s important to plan a strong, detailed response backed by authoritative economic and legal justifications for your existing prices. It’s also very helpful to have assistance from qualified and experienced Transfer Pricing professionals in your dealings with fiscal authorities to look for avenues and options tailored to your needs.
Have you assessed the risk of fiscal authority challenges? Do you know how to reduce and manage transfer pricing risk factors? Our Transfer Pricing professionals can assist you with Advance Pricing Agreements (APAs) or Competent Authority and Accelerated Competent Authority Procedure (ACAP) claims and negotiations to help prevent and resolve disputes with fiscal authorities and, where possible, reduce the related interest burden.