Transfer pricing hot topics

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Transfer pricing in a downturn – why is it of particular importance now?

Opportunities…

The current global business environment has created problems for groups including restricted cashflows, decreased earnings, stranded losses and reduced credit availability. Transfer pricing solutions such as the effective restructuring, repricing or refinancing of transactions can play an important role in addressing these issues. Existing transfer pricing ideas have been augmented by new opportunities arising from falling asset valuations, global credit spreads and unprecedented market conditions.

..and Compliance risks

Fiscal authorities globally are under tremendous pressure to maintain tax receipts in the current environment and are increasingly recognising the possibilities provided by transfer pricing for revenue raising purposes. In recent years there has been a rapid growth in the number of jurisdictions expanding their transfer pricing capabilities by introducing new legislation and recruiting specialist auditors. Businesses need to take action to address transfer pricing compliance risks, or face potential exposure to challenges which can cost considerable amounts in terms of management time and reputation as well as additional tax liabilities and penalties.