Transfer pricing continues to be in the spotlight and is an important matter for all multinational groups. The media storm around tax avoidance has pushed transfer pricing onto centre stage. As a result, a group’s transfer pricing policy is no longer just a tax matter but a corporate reputation matter being addressed at board level. This is evident in surveys of finance and tax directors, where transfer pricing is routinely listed as a key risk that groups have to manage.
Amongst the range of transfer pricing services we provide to help our clients manage transfer pricing risk, there are five key areas:
- Base Erosion and Profit Shifting (BEPS) & Business Models – the principles behind transfer pricing are experiencing a seismic change following the publication of the Organisation for Economic Co-operation and Development (OECD) BEPS Action Plan. The BEPS agenda addresses transfer pricing issues that interact with a group’s business model including pricing for intangibles, plus risk and capital. We help our clients understand and manage the implications of BEPS on their business.
- Funding – we have in-depth expertise in the area of funding. This will interest international and domestic groups wanting to meet the challenges of pricing debt, financial and performance guarantees and other treasury services.
- Global documentation – as the transfer pricing compliance requirements increase, we help our clients develop an effective, cost efficient means of preparing global transfer pricing documentation.
- Operational transfer pricing – we help our clients get from the transfer pricing policy to the enterprise resource planning (ERP) system, financial statements and tax return. We’ll also help them develop the governance framework controls and process needed for successful implementation.
- Dispute resolution – tax authorities worldwide continue to increase their scrutiny of transfer pricing. We help our clients proactively discuss their transfer pricing policies with the tax authority either through real time working or Advance Pricing Agreement (APA). We also support their transfer pricing policy on audit, or get competent authority relief through Mutual Agreement Procedure (MAP) or the EU Arbitration Convention.
In the UK, our Global Transfer Pricing Services (GTPS) business helps clients transform their business models, adapt to shifting international environments, manage transfer pricing risk, and help them develop transfer pricing strategies that underpin their wider commercial objectives. The GTPS team includes economists, tax practitioners, lawyers and financial analysts who work across our network to provide essential local knowledge within a global framework.
We have a pragmatic and scalable approach that can provide businesses of all sizes with a transfer pricing service and solution. We use our experience of working with businesses to help clients ensure their transfer pricing compliance and reduce reputational risk.
Far from being solely a risk management exercise, we encourage organisations to use transfer pricing to understand commercial transaction flows within their business. We recommend that clients consider how they fit within their overall value chain. This gives them the chance to ensure that the tax profile of their business matches their commercial and strategic objectives.