Transfer pricing compliance and documentation

In Tax

With revenue authorities focusing more widely and intensely on transfer pricing issues, having a transfer pricing approach that includes digital transformation is a must for operations with a global reach. From documentation to helping your practices match your policies and setting your digital objectives, our teams of experienced professionals can help anticipate and interpret the intent of tax authorities wherever you operate or intend to operate and be prepared for new developments and potential challenges.

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What EY can do for you

Today’s leaders understand that as authorities tighten their focus and tax laws change around the world to capture their “fair share of taxes,” traditional approaches may be less impactful for managing a global effective tax rate. With transfer pricing and the optimum allocation of business functions and risk increasingly gaining as critical tax forecasting metrics, now is the time to position transfer pricing as an increasingly important component in your tax and business considerations.

The purpose of transfer pricing services is to appropriately price and document intercompany transactions to comply with various countries‘ rules and legislations. As government policies shift, and tax authorities share data, it is imperative to fully understand how transfer pricing works and its relationship to managing tax risk. A global survey of transfer pricing leaders indicates:

  • 76% are challenged by the volume and complexity of global tax reforms
  • 65% feel they lack input into key business decisions
  • 58% cite new legislation among their top three transfer pricing risks
  • 57% say they are not involved enough in key business decision-making

Properly documenting intercompany transactions is the first line of defense when your transfer pricing practices are challenged.

Whether you choose to apply a globally centralized approach or a decentralized approach to your documentation needs, you should understand, anticipate and be flexible to the rigorous transfer pricing scrutiny in the countries where you operate so that you meet the local requirements, particularly where there is heightened risk. The EY risk-based transfer pricing approach allows you to align your company’s business strategies and tax considerations with your risk profile.

Addressing change

To effectively navigate business-driven changes in real time, organizations must remain nimble and gain footing by thoroughly understanding supply chains, functions and risks. The EY Transfer Pricing team has technology tools to enable you to monitor intercompany flows and manage intercompany pricing reporting and risks. When deployed, these tools can help organizations generate timely insights from a transfer pricing framework that are directly related to intercompany transactions.

Implementing intercompany transfer pricing effectiveness

Operationalizing transfer pricing policies is an ongoing challenge with varying levels of complexity for many multinationals. EY teams have developed a structured and scalable transfer pricing framework for improving transfer pricing implementation and building integrated systems and processes that function across tax, business units and operations.
Our flexible approach can help you develop sustainable practices to execute, monitor and report intercompany transactions.

EY Transfer Pricing Engine

Discover the EY Transfer Pricing Engine – an efficient and streamlined framework to help you approach, monitor and analyze your intercompany transactions with one core system. With advanced architecture and functionality, the EY Transfer Pricing Engine is cloud-hosted and available as Software as a Service, or our EY professionals can offer support by operating the tools to meet your business’s needs through our transfer pricing services.

Transfer pricing documentation

EY has developed TP Web™, a comprehensive transfer pricing documentation tool that is designed to help you streamline your internal processes and generate reporting packages to support Global transfer pricing documentation requirements (Worldwide Transfer Pricing Reference Guide | EY - Global).

Global support

We understand that more documentation and compliance requirements, stringent penalties, increased audit activity and an intensified focus on organizations “paying their fair share” all must factor into transfer pricing policies and approaches. To leverage our reach and gain “local” insights, we are located around the globe, and our teams of experienced transfer pricing professionals have in-depth and broad knowledge of municipal and regional issues that can help interpret the intent of tax authorities in the countries where you are or may soon be operating. As part of an integrated and extensive global transfer pricing network, our teams work seamlessly together from offices around the world, responding quickly to your global and local needs. Those best prepared to handle today’s globalized transfer pricing environment will be the ones able to identify what and where their risks are and, more importantly, how and when to resolve them.

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The outlook for global tax policy and controversy in 2022

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How leaning into transfer pricing transformation helps manage tax risk

The 2021 EY International Tax and Transfer Pricing survey finds transfer pricing executives should prepare for more risk and controversy.

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