Transfer pricing continues to be a burning issue on multiple, converging fronts.
While globalisation and the continued growth of international trade have made inter-company pricing an everyday necessity for many businesses, the drumbeat of new regulations, audits, enforcement actions - and sharply higher penalties - continues to grow louder.
In an era of fiscal shortfalls, tax authorities see transfer pricing as a soft target, and more and more countries are implementing new transfer pricing documentation requirements. At the same time, transfer pricing strategies are increasingly the subject of unwanted controversy — with the phrase ‘transfer pricing’ frequently used in the same sentence as ‘tax shelters’ or ‘tax evasion’ on the business pages of newspapers.
Although many of the drivers of this intensified scrutiny are based on factors beyond the control of most companies, the risks to your organisation are nonetheless very real. They include:
The impact of this dramatically increased focus on transfer pricing has created a highly uncertain operating environment for businesses, many of whom are already struggling with intensified global competition, escalating operating costs and the threat of recession.
PwC’s leading Global Transfer Pricing network* is here to help. With over 3,100 transfer pricing professionals — many hailing from academia, industry, and prominent positions within governments — deployed across 93 countries, we are well positioned to advise you on developing compliant, tax-efficient structures that help advance your business goals.
*These results are based on an independent survey of 2,561 primary buyers of transfer pricing tax services globally, conducted by research agency Jigsaw Research (Q1-Q4 2015).