Transfer Pricing Adjustments June 30 Deadline

As an exception to the rules governing deductions in our Income Tax Law, administrative rules allow taxpayers to increase their deductions as a result of transfer pricing adjustments for year 2016 provided a number of requirements are met, including:

1. Timely filing the following all tax returns including information returns.
2. Preparing and keeping all documentation and information showing that the original transactions was not at arm's-length.
3. Preparing and keeping a statement, under oath, explaining the reason why the originally agreed prices, consideration or profit margins did not conform to the arm's-length standard.
4. Preparing and keeping a statement, under oath, explaining the consistency or inconsistency (i) of the transfer pricing methodologies applied by the taxpayer and (ii) of the search for comparable transactions or entities, both at least with respect to the tax year immediately preceding the year of the transaction being adjusted.