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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...