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Transfer Pricing Documentation

Do You Have to Perform Fresh Transfer Pricing Analyses Every Year? Here’s Why You Should.

14th February 2023

When speaking with customers, I regularly receive this question: Why should I redo my benchmarking search every three years? If nothing has changed, can’t I (or shouldn’t I) just keep refreshing the financial data of my comparables until something changes? It’s a fair question. After all, Chapter 5 of the OECD Guidelines (Paragraphs 5.37 and ...

Will Volatile Foreign Exchange Rates Impact Your Arm’s Length Range?

07th February 2023

Given the current volatile currency exchange rate landscape, and the approaching year-end for many, taxpayers should take the time to consider what implications it may have on transfer pricing. The first step is to review your intercompany agreements, and ensure they are aligned with how exchange rates are being handled operationally. In other words, do ...

The Problem with Pillar One

24th January 2023

OECD’s Two-Pillar solution appears to have more and more turning points as it is subject to global discussions on how the new tax rules should work to be efficient and fair. While some rules are gaining acceptance, others may become real deal-breakers. Many countries have had a hard time agreeing to Pillar One, which expands ...

Transfer Pricing and Inflation: Why Timing is Everything

19th January 2023

Global inflation can add a layer of complexity to your transfer pricing documentation, especially if you’re using transaction-based methods to conduct your analyses. When relying on the sales of product or services to third parties as your comparables via the comparable uncontrolled price (CUP) or comparable uncontrolled transaction (CUT), cost plus (CP), or resale minus ...

The Deceptive Cost-plus Method

17th January 2023

It was more than 10 years ago, when I listened to a European transfer pricing expert, at a prestigious transfer pricing conference, talk about how he applies a cost-plus method with a cost-plus markup of 5% on fully loaded costs. I found myself confused because once you look at fully loaded costs, it’s really the ...

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Not All Transfer Pricing CUPS Hold Water

11th October 2022

As I often tell clients, in the best of circumstances, transfer pricing comps are, at the very least, tricky. Anyone who has ever been through a painstaking benchmarking analysis knows that finding reliable comparables is a perpetual hunt for needles in haystacks. And let’s face it: Today’s aggressive tax environment–where transfer pricing methods are one ...

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The Clock is Ticking When Tax Authorities Request Your Local File

22th September 2022

Any important job can be a little stressful, but throw in a tight deadline and something as simple as brushing your teeth can become downright anxiety-provoking. No wonder the sound of ticking clocks and stopwatches are used to add layers of suspense in everything from horror movies to competitive cooking shows. Tax executives are no ...

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Today’s Challenges for Pillar One and Pillar Two

20th September 2022

By now you well know, Pillar One and Pillar Two are part of the OECD’s ongoing project of combatting tax evasion and shifting profits to low-tax jurisdictions. Pillar One (applicable for large multinationals) aims at allocating taxable income to countries based on revenue generated in countries. Pillar Two aims to ensure that income is taxed ...

Financial district of London

Master and Local Files Required in the UK: Are You Ready?

13th September 2022

A diverted profits tax. A diversion profits compliance facility. And yet no official master and local transfer pricing documentation requirements. It’s almost like HMRC wanted multinational companies to endure transfer pricing troubles. Of course, that’s about to change with the UK’s recent adoption of BEPS Action 13’s master and local file requirements, which take effect ...

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5 Key Factors to Get Your Benchmarking Analysis Right

06th September 2022

Global tax authorities in various jurisdictions might have different compliance requirements, which are important to understand and monitor. Regardless of the jurisdiction, the one thing in common is that the “benchmarking analysis” is the bedrock of transfer pricing compliance. Getting it right is one of the highest priorities for tax professionals when it comes to ...