The work of the OECD, the EU State aid investigations, public
perception and the hunt for public funds by various Governments,
mean that transfer pricing disputes will likely increase over the
coming years. At any given time, multinational companies are now
the subject of transfer pricing audits in numerous jurisdictions,
with the potential for related transfer pricing adjustments.
Taxpayers need to determine the appropriate allocation of their
resources in prevention (developing and documenting transfer
pricing policies, seeking advance pricing agreements
("APAs") and defence (dealing with
transfer pricing audits globally). Country by country reporting and
exchange of information provisions also mean that group
arrangements cannot be dealt with in isolation and global tax
departments need to develop a holistic and centralised view to
transfer pricing policies adopted, and any transfer pricing
adjustments agreed with tax authorities.
