Transfer Pricing FAQs
Why should companies review transfer pricing?
All companies with cross-border operations have transfer pricing issues. The cross-border prices charged on goods, services, royalties, and loans drive how much tax is paid in each country. Simply stated, tax authorities are concerned about multinationals underpaying taxes through incorrect transfer prices. Transfer pricing audits can result in substantial additional tax and penalties on a global basis.
Transfer pricing also impacts a company's global effective tax rate. We find that many companies can optimize cashflow with a strategic review of transfer prices. Furthermore, some companies can realize substantial tax savings under tax reform through corrections to transfer pricing. Transfer pricing also affects FDII, GILTI, and BEAT calculations under US tax reform.
What are my options for supporting transfer prices?
Under audit, tax authorities in the US and internationally can demand evidence that cross-border prices are charged on an "arms-length" basis. Annual transfer pricing documentation reports are prepared to justify intercompany prices to tax authorities. A documentation report provides companies their first and best chance to avoid a transfer pricing audit in the first place. Depending on company size, many countries require annual transfer pricing documentation.
We have extensive experience in preparing US, OECD/BEPS transfer pricing documentation. We can also update your existing transfer pricing documentation for annual compliance purposes.
Documentation is not the only option for many companies, where appropriate, we have other practical alternatives depending on a company's risk profile and budget limitations.
Why consider KBKG for Transfer Pricing Services?
KBKG delivers as much practical transfer pricing expertise as the largest firms but with a focus on tax savings. KBKG delivers time-tested solutions with Alex Martin’s 20-plus years of full-time US and international transfer pricing experience. We understand how tax authorities assess transfer pricing issues and mitigate risks accordingly. We also develop transfer pricing strategies to improve company cashflow.
Professional service firms across the US and internationally rely on our transfer pricing expertise to complement their tax and accounting offerings. We offer complimentary group training webinars for your team.
As a tax specialty firm, we serve as your resource: your sounding board for questions all the way up to, and including, high-stakes transfer pricing audit defense.