Despite challenges such as increased regulatory scrutiny worldwide, the volume and types of intercompany transactions, and overall complexities of international laws, transfer pricing planning opportunities remain and compliance is crucial.
A lesser known fact is that transfer pricing applies equally to multi-national companies as well as small- to medium-sized businesses operating domestically in the U.S.
A well-designed transfer pricing policy and implementation can help address tax liabilities, while also focusing on unintended exposures, penalties and even reputational damage caused by poor planning and implementation.
Is My Existing Transfer Pricing Working Well?
EisnerAmper can help you determine whether your current transfer pricing is working well. Our “check up” covers a variety of areas that can be of concern:
- Entities incurring losses (beyond the start-up phase);
- Difficulty posting year-end transfer pricing adjustments due to restrictions on remittances;
- Uncertainty regarding which entity owns intellectual property, bears risks, and drives business value;
- Ambiguity about the amount and basis for intercompany services, technical assistance, or management fees;
- Application of U.S. tax rules such as the foreign tax credit and Subpart F arising from intercompany transactions;
- Challenges with local countries’ transfer pricing protocols, compliance requirements, and statutory deadlines;
- Excessive withholding taxes;
- Difficult to calculate appropriate basis for funding of R&D work worldwide;
- Protracted audits and tax controversy due to poor documentation; and
- Lack of clarity regarding implications of the new transfer pricing guidelines arising from the OECD’s so-called “BEPS” (or Base Erosion Profit Shifting).
How EisnerAmper Can Assist
Our Transfer Pricing team includes an experienced team of international tax experts, accountants, and economists. Whether your company needs guidance with transfer pricing policies or help with implementation or a simple “check-up,” EisnerAmper’s team can assist as follows:
Transfer Price Planning
For start-up companies and businesses with transfer pricing policies in place, EisnerAmper offers:
- A First Landing Package - EisnerAmper’s proprietary approach for start-up companies who need initial transfer pricing assistance Insightful advice regarding transfer pricing policies, procedures, documentation as well as controls and systems for setting, monitoring and testing inter-company transactions;
- Support in optimal tax structuring and aligning transfer pricing with business realities; including the valuation of intangibles and other assets for tax and legal purposes; and
- Review for State and Local (SALT) tax exposure and tax planning opportunities.
Risk Mitigation and Compliance
To avoid financial and reputational risks, companies may benefit from these EisnerAmper services:
- Transfer pricing documentation studies for U.S. and foreign compliance purposes;
- BEPS Readiness Assessment and support for country-by-country compliance support;
- Support in securing Advance Pricing Agreements and Mutual Agreement Procedures;
- For SEC registrants, FIN 48 analysis relating to transfer pricing matters; and
- Assessing and assisting with workpaper transfer pricing positions.
Tax Authority Controversy
Unfortunately, in a shifting regulatory environment, governmental tax authorities may challenge companies’ transfer pricing positions. In that event, EisnerAmper can assist as follows:
- Tax audit defense
- Litigation support including expert witness representation
- Assistance with competent authority negotiations
IP Transfer Pricing
Due to globalization trends, goods and intellectual property (“IP”) are crossing international borders between related parties at a record pace. Even though your cross-border transactions may appear to be seamless, the IRS and other tax authorities may be watching. EisnerAmper’s IP Services Group [link] has significant experience in establishing the transfer pricing documentation to support your transfer pricing policies.
A company’s transfer pricing policies can be affected by:
- The transfer of IP ownership across international borders.
- Inter-company licensing of IP across international borders.
- Documentation of products produced utilizing IP and subsequently sold to related parties across international borders.
Transfer Pricing HUB
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