Governments around the globe are focused on transfer pricing enforcement as a preferred method of augmenting tax collections, leading to more aggressive tax and transfer pricing audits for multinational corporations.
While transfer pricing compliance is principally a matter for senior tax executives, responsibility for the actual execution of inter-company transactions is generally spread out across a broad chain of often detached internal functions and distant offices.
The entire process typically involves multiple hand-offs between tax, regional/global controllership, shared services, information technology, and external advisers. In the absence of unified oversight or co-ordination, fiscally unsound conditions can develop at every transaction point. These can include:
It’s easy to see how these conditions can expose multinational organisations to significant risks, including compliance and tax risks (material errors) and gross inefficiencies - not to mention frustrations resulting from breakdowns in the execution chain.
Clearly there is a need to address transfer pricing as a more holistic, end-to-end (E2E) process, one that draws together the wider chain of activities into a well-defined set of procedures - from strategy, all the way through your financial and operational systems, to your local financial statements and tax returns.
While the process of examining multiple internal functions and addressing your procedures, personnel, and technology can be lengthy and complex, the benefits of a more strategic E2E transfer pricing execution can be widespread and long-lasting. These include:
PwC’s transfer pricing professionals can help you reinvent your E2E strategy and processes, leading to a more streamlined approach, reduction in workload, increased accuracy of charges, significantly enhanced transparency, and - not least - well-positioned documentation to support future reviews, including local statutory audits.
Contact us to learn more about how we can help you adopt a strategic, end-to-end approach to your transfer pricing execution.