A new era of transparency, identified tax risk management as the top priority when considering transfer pricing.
A survey involving 623 tax and finance executives across 36 countries reflects the striking impact of global calls for greater tax transparency on the boardroom agenda.
Businesses that are not prepared to meet transfer-pricing standards mandated by the OECD’s Base Erosion and Profit Shifting (BEPS) project
will come under increasing pressure to be proactive in disclosing transfer pricing activities.
Only 21% of businesses are in a position to adapt to the changing global transfer pricing conditions. Furthermore, only 21% of businesses
fully comply with global documentation rules and are prepared for potential future government audits.
Adapting to the new reality of global regulations will be key to executing effective and compliant transfer pricing. 73% of those surveyed
are still monitoring transfer pricing results on just annual or quarterly bases. It's clear that a significant step change needs to take
place, especially when it comes to transfer pricing compliance
69% of respondents consider establishing a clear vision and strategy as the best approach to addressing the challenges associated with
transfer pricing. However, only 35% describe their readiness to do so as “high”. And for many businesses, there’s no quick fix to managing
transfer pricing as a global business. In fact, 49% identify lack of automation as the most difficult challenge in adapting the operating
Griffin says: “Companies need to adapt their transfer pricing processes to keep up with changes such as real-time reporting conducted by governments. Relying on a periodic, ad hoc manual adjustment process is no longer enough and could be costly both in terms of time and resources.”