Transfer Pricing

Multinational tax challenges are among the most complex and potentially expensive issues facing companies with international operations. At the same time, this complexity provides opportunities to optimize profits, increase cash flows and moderate taxes.  In addition, middle market companies are increasingly going global and when global companies begin to transact business in multiple countries, each country has an interest in assuring that the companies properly report their income to that jurisdiction. Transfer pricing rules adopted by the U.S. and its trading partners require transactions between related parties to be valued using an arm’s length standard. Related parties include parent companies and subsidiaries or brother-sister company relationships where two companies share a common parent. 

Transfer pricing has recently become a significant focus of the Internal Revenue Service and taxing authorities around the globe. Documentation requirements are often complex and are required to be completed prior to the filing of the tax return reporting intercompany transactions. To avoid penalties a transfer pricing study must be completed contemporaneously with the filing of the tax returns. The study must document that a reasonable arm’s length price is used for transactions involving related parties.

We can help clients understand the transfer pricing requirements, can complete documentation to avoid penalties, and can assist in developing a worldwide strategy that minimizes double taxation and reduces the worldwide effective tax rate.

Our professionals can: 

  • Review a subject company’s intercompany pricing practices 
  • Perform a transfer pricing study to prepare documentation meeting IRS and foreign requirements 
  • Help you minimize the risk of double taxation and reduce your worldwide effective tax rate

Please contact Seema Parikshak Verma for more information:

Seema Parikshak Verma

Indianapolis, IN