Expanding Your Firm’s Transfer Pricing Capabilities
Robert Feinschreiber and Margaret Kent
Consider the transfer pricing impact as its expansion in 2020 is ready to begin: (A) Multinational enterprises are facing a plethora of transfer pricing audits in many areas of the world in which they do business. (B) We are facing rapid changes to the digital economy taxation, nexus-eroding and lowerbased CbC thresholds, all adding to transfer pricing complexity. (C) The OECD, CIAT, and other transnational organizations will be advocating their own inputs to the transfer pricing process.
Where will these inputs leave transfer pricing service firms? Transfer pricing service firms reflect variations of skill-sets among transfer pricing professionals. New complexities are creating the need for transfer pricing services firms to acquire their increasing “smarts.” We encourage transfer pricing service providers to examine and delineate their own areas of professional expertise. For example, Robert Feinschreiber and Margaret Kent have made such a determination, reflecting fifteen advanced transfer pricing areas:
For Example, What Feinschreiber and Kent Provide as Transfer Pricing Experts
• Establishing criteria to Increase the relevancy of the enterprise’s economic database. Opting out of broad-based SIC and NAICS coding to achieve true economic transfer pricing comparables
. • Applying matched unilateral APA agreements in lieu of applying bilateral APA processes. Ascertaining when it is advantageous to make this choice of APA methodologies.
• Initiating the sixth transfer pricing method as its best method selection. Applying this sixth method for natural resource providers and for agribusiness enterprises.
• Determining when the umbrella APA is advantageous for an enterprise. Developing comprehensive industry-specific standards in formulating an APA umbrella agreement.
• Developing behaviors that would curtail transfer pricing professional malpractice claims. • Splitting-off product manufacturing processes for cost accounting transfer pricing purposes. Transfer pricing ramifications of using the by-product and the joint product methodologies.
• Applying antitrust / competition law issues that impact transfer pricing and EU state aid. • Negotiating transfer pricing audit defenses and pursuing transfer pricing tax litigation. • Analyzing U.S. state transfer pricing considerations for digital and non-digital transactions.
• Structuring permanent establishment tax treaty issues.
• Applying digital tax configurations for wholesaler – intermediaries in the digital supply chain.
• Legal drafting of transfer pricing agreements to achieve expeditious tax disputes. • Substantiating the ramifications of CbC allocation-key selection possibilities.
• Providing expert sources for complex transfer pricing issues.
• Ascertaining how investment treaties differ from tax treaties in the client context.
Interfacing with Transfer Pricing Service Providers Ask yourselves whether your firm expresses areas of expertise within the transfer pricing community. Then consider the possibility that your transfer pricing services firm can interface with transfer pricing service providers who can provide needed professional expertise. Does your transfer pricing services company have the transfer pricing expertise that your organization needs in functional areas such as those 15 specific structures mentioned above? Let us know your thoughts
