This article explains the difference between domestic and international transfer pricing. For understanding, we first need to look at domestic vs international controlled transactions.
The number of transfer pricing disputes is increasing. GE, Starbucks, Apple, Facebook and Nike are just a few examples of the many MNEs that are, or have been, subject to disputes around the world. Moreover, the counter-parties of these disputes are not just tax authorities, but also supranational organizations, such as the European Union. And it is not just large-listed MNEs that face scrutiny. Smaller MNEs are subjected to the same legislation after all.
This short article first discusses the nature of transfer pricing disputes. It then lists the most common dispute areas, before moving on to a few basic measures you can take to limit your risk on a transfer pricing dispute. [Read more…]
Transfer pricing has become the key focus area for tax authorities when assessing taxpayers. An explanation for this is that transfer pricing corrections are generally an easy way to drive tax proceeds. Within the industry it is observed that the number of transfer pricing “audits” increases when there is a large deficit in a government’s budget. This will of course be denied by tax authorities, but in practice, everyone knows about it.
If your firm is subject to Transfer Pricing Rules, there is a good chance that at some point you experience scrutiny on your policy. This may sound as a nightmare, and in some cases it is. However, the vast majority of transfer pricing audits do not end badly.
In this short article we provide information about transfer pricing audits, and suggestions on how you can handle these efficiently. [Read more…]
If you’re looking for more information on the implications of transfer pricing on Mergers and Acquisitions, you’ve come to the right place. It is absolutely important to consider transfer pricing before closing any M&A deal. This can help you to negotiate a better deal and/or avoid financial surprises after the deal is done!
Before we continue, it is important to understand that the main purpose of transfer pricing rules is to examine the ‘arm’s-length’ nature of ‘controlled transactions’. If these terms don’t ring a bell, we advise you to first read our article What is transfer pricing?
If you are looking for more information on the Profit Split Method, this article is for you.
Below, we explain this transfer pricing method in more detail, provide an example and explain when and how you can use it.