Bennett Thrasher Tax Partner Ben Miller recently spoke at a seminar at K&Y on transfer pricing. During the presentation, Miller shared the common mistakes made by multinational companies when pricing intercompany transactions and offered insight and simple steps companies can take to confirm their transfer pricing is appropriate and how to build an audit defense file. Additionally, he walked the audience through the typical steps of an IRS transfer pricing audit. The presentation was well received by the Korean-American press, with coverage in News Korea and News Focus.
Transfer pricing issues are increasingly complex, but our experienced team is dedicated to working with you to address transfer pricing risks and find opportunities in a cost effective, strategic manner. Below are key takeaways from Miller’s presentation and how BT’s services can support your global needs.
- International companies are audited roughly 10 times more often than domestic companies; transfer pricing audits are generally long and costly when taxpayers do not have documentation to provide IRS at the outset of the audit.
- The goal of transfer pricing is to allocate income among jurisdictions where an MNE operates in proportion to the relative value generated by the MNE in each jurisdiction.
- A well-deigned transfer pricing approach is an effective tool for managing global tax liabilities without creating incremental tax risk.
- Transfer prices can be used as the value of a good for customs purposes in some instances; companies should consider transfer pricing strategies to managing increasingly burdensome customs duties resulting from the current trade war.