Transfer pricing and the green agenda

The green agenda will unquestionably trigger many transfer pricing issues. Challenges will arise, but among them will be significant opportunities for effective planning so that businesses can understand the implications of their present and planned green agenda strategies.

Arguing that there are big benefits from up-front action, this article introduces key issues, including:

• The pricing of emissions credits, subsidies and group compliance with regulatory schemes;
• The interaction of brands and green business policies;
• The effect green spending may have on existing transfer pricing models and benchmark sets; and
• The opportunities from tax effecting changes to business models that come about as a result of environmental concerns—for example new logistics practices or emerging technologies and their attendant intellectual property.

To reap the benefits and achieve the best results, companies should start now to tackle the issues head-on as soon as they arise. By acting now, forward thinking companies will realise long-term benefits to having the best possible transfer pricing solution that provides robust compliance and creates conditions that result in significant tax savings.