Four things multinational enterprises should do differently
As in other years, our 2010 survey shows that companies should:
- Adopt efficient global documentation strategies
- Devise dispute resolution plans, both preventative and remedial
- Embed tax considerations in business change
This year, the survey re-emphasizes those points, but with some subtle differences:
- Audit trends reveal the need for “glocal” documentation.
Multinational companies should tailor their global transfer pricing platform to local requirements in higher-risk, more complex countries.
- With audits up and material penalties significantly increased, avoiding disputes will be tougher.
Multinational companies should consider a more proactive approach to controversy management, including appropriately targeted APAs.
- Service, intangibles and financing transactions are increasingly in the sights of tax authorities. Our experience is that documentation of these categories of transactions often lags behind documentation for tangible goods transactions.
Multinational companies should develop or enhance their documentation for these transactions.
- OECD developments are pushing profit-based methods to the forefront while MNEs continue to rely on transactional methods to determine and document their intercompany pricing policies.
Multinational companies should consider profit-based methods as corroborating or primary methods.