Thought leadership › Global guide
Taxand / IBFD 2012 Global Guide to Transfer Pricing
Today, transfer pricing is one of the most important issues facing MNCs as they attempt to fairly distribute their profits amongst each company in the group while dealing with tax authorities who are implementing transfer pricing regulations and strengthening enforcement in order to prevent a loss of revenue. The result of which is that transfer pricing controversies have become a major tax issue for companies.
Our Taxand / IBFD Global Guide to Transfer Pricing 2012 brings you:
- overview of the current transfer pricing laws
- guidelines and methodologies in practice
- standardised chapters, with quick and easy comparisons
- insight from 35 countries, globally
- the official text of 2010 OECD Transfer Pricing Guidelines
The role of MNCs in world trade has increased dramatically over the last 20 years. The growth of MNCs presents increasingly complex taxation issues for both tax administrations and the MNCs themselves, since separate country rules for the taxation of MNCs cannot be viewed in isolation but must be addressed in a broad international context.
That's why Taxand has collaborated with the IBFD to produce this guide. Key TP information has been provided and assessed by Taxand TP practitioners and IBFD professionals experienced in working with multinationals. These global practitioners, present their domestic expertise, in an international context.
When dealing with ever-changing country tax legislation, increased complexity and the risk of double taxation, multinationals should be prepared to:
- Use effective transfer pricing planning to reduce the increasing costs and burden of compliance
- Adopt the arm's length principle and a separate entity approach in OECD countries to promote cross-border transactions
- Avoid costly litigation by finding mutually satisfactory solutions to transfer pricing issues
- Consider all aspects of transfer pricing, including the fair allocation of the burden of proof, to achieve a balance between taxpayers and tax administrations interests
Antoine Glaize, Global Transfer Pricing Leader at Taxand, commented: "Across much of the globe we are seeing harmonised systems with consistent approaches to transfer pricing principles in place. Despite this, we still have a few select countries working to slightly different rules and practices, and others that have some catching up to do in terms of enforcement; this is most notable in emerging markets, especially in Asia, where the transfer pricing knowledge base is relatively low amongst the tax authorities.
"Multinationals are continually increasing their knowledge and understanding of the complexities of transfer pricing principles globally. However, the rising levels of authorities scrutinising financial transactions from a transfer pricing standpoint is starting to cause some concern amongst multinationals. We hope that the Taxand IBFD global guide to transfer pricing is an essential reference for multinationals."
Use this guide as a reference tool to get you started. Then consider seeking advice to approach transfer pricing not merely as a matter of risk management but also as a highly effective international tax planning tool, taking all areas of taxation into account.
As our Taxand Global Survey 2012 revealed, despite a sharp rise in transfer pricing regulation enforcement, multinationals are becoming more familiar with compliance demands and developing stronger relationships with tax authorities. Despite that, inter-country trade and investment is on the rise for many multinationals. Improved coordination between countries is therefore key. Minimising conflict and ensuring cooperating across borders is as important as ever. Transfer pricing remains one of the most important issues facing our clients today. Now more than ever multinationals must act.