Facts

According to a Global transfer pricing survey, transfer pricing represents the most significant international tax issue facing companies with international exposure. This is further confirmed by the following facts:

• Sixty-eight percent of all survey respondents said that transfer pricing is the biggest international tax issue they face in the next two years.
• Eighty-six percent of parent and ninety-three percent of subsidiary respondents identified transfer pricing as the most important international tax issue they currently face.
• Fifty percent of respondents who have experienced an audit have reviewed their transfer pricing documentation and a majority of them improved their documentation practices as a result.
• Seventy-six percent of all respondents think an audit is likely in the next two years.
• Services and intangibles are attracting increasing attention from tax authorities worldwide
• MNEs should expect a transfer pricing audit as a rule rather than an exception.
• All companies are exposed to audits; however the bigger companies have a higher than average exposure.
• A penalty was actually imposed in half of the cases in which it was threatened.