The impact of the pandemic on businesses has been varied between countries, industries and even between individual enterprises. Some market sectors have suffered the worst crisis since the Great Depression while others have proved to be surprisingly resilient and some businesses are thriving. This has created multiple challenges on how we approach price setting for intercompany transactions specifically when applying the Transaction Net Margin Method (TNMM). For instance, a time lag in availability of financial statements of comparable companies, which in stable economic environment does not present a significant challenge, could create huge issues in the case of an typical year such as 2020. Additionally, even when the data is available, the varied impact of COVID-19 could reduce the usefulness of the existing comparable set. This article suggests various approaches to comparability adjustments that can be considered when performing an economic analysis.

Download COVID-19 economic analysis

The COVID-19 pandemic has accelerated the future of work. For many businesses there will be reduced importance as to where work is done and an increased focus on how work is done. In this article, we have explored the corporate tax consequences that could arise when employees are working remotely abroad, be it during the COVID crisis or as part of the new normal. Especially the permanent establishment exposure, the associated profit allocation and/or transfer pricing considerations and the ways in which they may be addressed going forward are considered in this article.

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As part of their response to COVID-19, governments worldwide have intervened in many ways to bridge the drop in demand caused by lockdowns and continued social distancing. Government assistance can have significant transfer pricing implications when not implemented well and, therefore, in this article we consider how to deal with government interventions in general, as well as considerations specifically in relation to the COVID-19 interventions. Further, we will elaborate on some country specific guidance on government incentives and we conclude this article with the relevant basic financial accounting treatment.

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The Corona pandemic is a severe blow to global value chains and the direct related interdependencies between individual stages of the value chain. Supply chains that were developed over a number of years and tailored for efficiency were stable up until this point. With the outbreak of the pandemic in China, supply chains collapsed in the first quarter of 2020. Even prior to the financial crisis in 2008/2009, companies had already begun to demand flexibility and dynamic behavior.

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More than six months have passed since the emergence of COVID-19 and many businesses have taken steps to respond to the pandemic and are continuing to adapt and recover. The way in which businesses are affected, and the extent of that impact, varies widely. However, what is clear is that overwhelmingly businesses have faced change and that in turn raises transfer pricing questions which tax teams need to grapple with.

Download: Covid19 Transfer pricing considerations six months in

We have all been living for a number of months now with the impact of COVID-19 and this has resulted in significant changes across businesses in the short term with many of these likely to have a more long term impact going forward, even after the pandemic has, hopefully, become less of an immediate challenge. Many such changes will come with transfer pricing implications that need to be thought through and require actions to be taken. Through the series of articles below. Deloitte transfer pricing explores further these changes, the associated transfer pricing considerations and the ways in which they may be addressed.

Download: Transfer pricing in an era of Digital Transformation

In this 2018 global study, Deloitte recently commissioned an extensive, global, independent research to understand emerging Transfer Pricing trends. The study participants included top tax decision makers from multinational companies with revenues in excess of $1 billion USD.

The research has revealed three major trends:

1. Centralization: A trend towards greater centralization in transfer pricing operations. It was acknowledged that the pace and degree of centralization was likely to vary considerably between businesses.
2. Consolidation: Increased market share for the Big Four firms is a steady, pervasive trend, however the market still seems highly complex and individualized to each businesses intended approach.
3. Specialization: Businesses want more than "off the shelf" solutions including tailored advice and innovative ideas across supply chain, intellectual property, legal, and indirect tax.

Download PDF: Trends in transfer pricing; Global research bulletin