Transfer pricing
Multinational organizations are operating in an environment of unprecedented complexity. The rising volume and variety of intercompany transactions and transfer pricing regulations, accompanied by increased enforcement activities worldwide have made transfer pricing a leading risk management issue for global businesses.
The goal of Deloitte member firms' (Deloitte) globally-managed transfer pricing network is to help companies reduce risks by aligning practical transfer pricing solutions with their overall global business operations and objectives, assist with strategic documentation to support their transfer pricing practices, and resolve disputes efficiently. Deloitte has a well-earned reputation for quality and delivering results. Our services include:
- Transfer pricing planning and documentation
- Dispute avoidance: Advance pricing agreements
- Dispute resolution: Examination defense and mutual agreement procedure/competent authority
- Business model optimization
Transfer pricing planning and documentation
Multinational businesses are expanding the volume of related-party transactions and continuously improving supply chains. This coupled with increased tax authority collaboration across borders presents both risks and opportunities. Deloitte provides practical solutions such as strategically approaching transfer pricing documentation requirements, which enable global businesses to achieve operational and international tax planning objectives. For multi-country projects Deloitte has a Global Transfer Pricing Center, that includes economists, tax professionals and MBAs who have on-the-ground international transfer pricing experience and specialize in Europe, the Americas or the Asia Pacific region. This centralized, global approach facilitates uniformity of reporting and eliminates internal inconsistencies which can arise from multiple service providers, thereby making the process more effective and efficient and easier to successfully defend.
Deloitte delivers transfer pricing planning and documentation services using the Global Dox Insight methodology. It is powered by TP Search Smart technology, streamlining and accelerating the gathering and processing of data and information needed to make informed business decisions.
Dispute avoidance: Advance pricing agreements (APAs)
Transfer pricing presents many tax, legal and operational challenges. To many taxpayers the magnitude of uncertainties – including the potential commitment of management time to successfully defend a transfer pricing examination – is not an acceptable business risk. APAs allow taxpayers to proactively achieve greater certainty via advance agreements on their transfer pricing methods with one or more tax authorities. Deloitte's experience with the APA process spans the entire history of all the national programs. Our historical knowledge of how to achieve successful results helps companies manage their transfer pricing issues – particularly the risk of double taxation – on a prospective basis.
Dispute resolution: Examination defense and mutual agreement procedure/competent authority (MAP/CA)
Missteps that affect the course or outcome of a transfer pricing examination often occur in responses to the initial tax authority enquiries and interviews. The most effective and efficient defenses include early involvement of an experienced global team that has successfully resolved examinations at all possible levels of the process, from proposed adjustments by field agents, through Advance Pricing Agreement, administrative appeals, litigation and the MPA/CA process. Deloitte takes an integrated approach to resolving transfer pricing disputes in the MAP/CA process. Our teams include transfer pricing MAP/CA specialists from both countries teamed with professionals who specialize in local country requirements for indirect taxes, taxes imposed by local or state/provincial jurisdictions, international tax and interest calculations for late payment that invariably affect the outcome.
Business model optimization (BMO)
The global economic environment is characterized by continuous improvements in technology, urgency to adopt and implement best practices and processes, and the potential for legislative changes. Assessing a multinational's global business model is no longer an optional exercise. Business Model Optimization (BMO) is the process of balancing the demands of operations and tax law and integrating them into the business model. This helps ensure tax planning does not curtail the bottom line and that the business model does not surrender some or all of the value it creates. Deloitte provides high quality, customized tax and BMO services that focus on helping multinationals integrate operational and tax planning in a scalable and sustainable way in order to enable business leaders to make more effective decisions on an after-tax basis.
Deloitte delivers business model optimization services using the BMO Insight methodology, a set of experience based approaches to developing solutions to a range of tax issues and opportunities.
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