Following the Organisation for Economic Cooperation and Development's (OECD) base erosion and profit shifting (BEPS) initiative, tax authorities worldwide are seeking effective methods to identify and attribute profits to their jurisdiction correctly.
Furthermore, various U.S. tax reform provisions in the Biden Administration FY22 budget, and the Treasury Department Greenbook explanation of Biden's tax proposals, could create adverse tax consequences for certain related-party transactions. Conversely, they may now present planning opportunities. Given the exponential rise of comprehensive tax policies and globalization demand for tax-related transparency in the transfer pricing landscape, here are the top transfer pricing issues that multinationals should consider.
Have You Properly Assessed Transfer Pricing Risk?
There are certain factors that can affect how susceptible your company is to transfer pricing risk. Understanding your transfer pricing risk is the best way to mobilize resources so that you can manage and transfer your risk more effectively. Some factors to consider may include (but are not limited to):