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Working As An In-House Tax Team On Transfer Pricing
Multinationals are enhancing their in-house tax teams with transfer pricing expertise, becoming more involved in transfer pricing reviews, and even purchasing software that enables them to control the compliance process in the relevant jurisdictions. Taxand UK set out some key recommendations for advisors and clients from an in-house tax perspective.
Advisors are increasingly teaming with in-house tax departments in areas such as advance pricing agreement negotiations with tax authorities and transfer pricing design. This is helping clients target resources more effectively and produces improved, robust results by embedding commercial reality into the review process. This is a clear change in dynamic in the UK market, and a welcome one, as it confirms that the commoditised approach to transfer pricing is no longer sustainable.
It is crucial that you learn how your business works as you will end up interacting with all its different divisions, so chances are that if you try to sell transfer pricing or other tax work without understanding the business, you will lose your credibility as an advisor in front of the client.
Clients can choose to test advisors' understanding of the business to obtain improved results. Based on experience, the best planning results are gained from the inclusion of a multitude of relevant skill sets. Advisors can assist here by making more efforts to understand how planning ideas affect the business as a whole. The times when businesses did not have the skills, expertise and the numbers to do their tax and transfer pricing planning are long gone. Multinational groups hire highly skilled professionals who have the necessary expertise and know their business more effectively than many advisors. A combined approach is starting to wield impressive results - not just in planning, but also in dispute resolution. Note that an independent, unbiased opinion from an advisor will always be valuable (as long as there is actually an opinion and not a long list of caveats and provisos).
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