The practice includes economists, tax practitioners, lawyers (where permitted under local law) and financial analysts from KPMG member firms around the world who offer experienced local resources and essential local knowledge within a global framework — allowing us to formulate tax efficient, commercially viable transfer pricing policies.
Our Global Transfer Pricing Services (GTPS) professionals provide advice on the following areas.
- Planning — we help multinationals develop and implement commercially viable, fiscally efficient transfer pricing policies and modify existing policies to reflect changes in local law or business circumstances. We help companies assess the impact of transfer pricing policies on their overall tax position.
- Compliance and documentation — we help multinationals design and implement global compliance policies and procedures and prepare local documentation for a strong, first-line defense against challenges from the tax authorities. GTPS delivers a globally consistent service to clients using KPMG’s Web-based transfer pricing platform, Interpreter®.
- Implementation — we help multinationals translate their transfer pricing policies into transaction-level prices, reconcile transfer pricing and customs requirements and automate transfer pricing calculations. We also help companies test and report transfer prices as well as to develop processes and tools to monitor transfer pricing results.
- Dispute resolution — when challenges from the tax authorities arise, we can help companies respond with detailed, authoritative economic justifications for existing transfer prices.
- Alternative dispute resolution — We help multinationals assess and manage their transfer pricing risk factors and pursue bilateral or multilateral Advance Pricing Agreements (APAs) or Competent Authority negotiations.
KPMG designed its global, Web-based Interpreter® software with our firms' multinational clients’ needs in mind. Interpreter®, a globally shared internal platform, is also available to clients.
The critical role of effective global transfer pricing policies
In an increasingly global business environment, multinationals commonly no longer make, market and sell their goods and services within national borders. However, fiscal authorities vigorously defend their national tax bases with detailed transfer pricing regulations, strict documentation requirements, sophisticated audit practices and significant penalties for non-compliance.
Multinationals must be able to present clear arguments to support transfer pricing decisions because the tax authorities reviewing a cross-border related party transaction might not agree on an appropriate ‘arm’s length’ price. The decisions organizations make must be substantiated by authoritative analysis and a good understanding of the local rules governing their transactions.
Forward-thinking companies recognize that effective global transfer pricing policies must do more than simply enable them to comply with national rules. They know transfer pricing issues have to be addressed long before transactions actually occur and they try to make their transfer pricing policies into strategic tools for investment and supply chain decisions, as well as for global tax planning.
Adapting to constant change
There are no signs that the turbulent international environment for transfer pricing will settle down soon. New reporting rules with major implications for transfer pricing policy and documentation emerge with increasing regularity. Recent judgments from the European Court of Justice have put EU transfer pricing rules into the melting pot, and formal compliance with the OECD guidelines does not prevent disputes with tax authorities over local transfer pricing rules.