Global transfer pricing survey 2007-2008

Transfer pricing is a risk issue for multi-national enterprises (MNEs) when it comes to financial reporting. Transfer pricing audits are increasing, and tax authorities are willing to impose adjustments and penalties.

This report covers 850 MNEs in 24 countries, and summarizes their transfer pricing practices, perceptions, and audit experiences, and provides insight into how they are dealing with the economic, regulatory, and fiscal changes taking place around the world.

Since 1995, Ernst & Young has surveyed MNEs on international tax matters. The scope of our biennial transfer pricing research reflects the growing number of countries that devote attention to transfer pricing through increased enforcement and regulatory activities, as well as the diversity of transfer pricing issues facing MNEs.

Download the "Global transfer pricing survey 2007-2008: global transfer pricing trends, practices and analyses" (pdf, 1.2mb) for findings from each country, compared with regional and global results. Also read analysis of issues including documentation and controversy risk management practices, convergence of customs and transfer pricing, the impact of financial reporting requirements, and audit experiences, as well as insight into industry sectors.

Key findings from the report include:

• Forty percent of all respondents identified transfer pricing as their most important tax issue.
• Over half (52%) of all respondents have undergone a transfer pricing examination since 2003, with 27% resulting in adjustments by tax authorities.
• Eighty-seven percent of all respondents consider transfer pricing a risk issue in relation to managing financial statement risk.
• Sixty-five percent of respondents from parent MNEs believe transfer pricing documentation is more important today than two years ago. But only one-third of MNEs prepare transfer pricing documentation on a concurrent, globally coordinated basis.