Transfer Pricing
The survey is based on the shifts in pricing model taking place across the globe. In a study of 623 executives of transfer pricing covering 36 locations among the 17 industries affected by pricing transfers, the survey narrows down to investigate the reasons behind the disputes associated with pricing among the jurisdictions based on the response from the study. The study was carried out in the year 2016, defining pricing transfer as a string of Art through which is compared to a thread pulled together using taut connecting pins that form geometric shapes.
The survey showed that transfer pricing is undergoing a heightened tax-risk besides a controversial regime that has been fostered by a rapid increase in the tax-associated transparency demand. The high pressure on transparency and adherence to tax regulations has led to the oversharing of tax information and other relevant data regarding operations across companies globally. Due to the primarily shared information about companies and their services, questions regarding their incomes, and whether they avoid taxes become louder. Some of the questions asked are how companies can work with the realities of transfer pricing, how companies can maneuver transparency as well as compliance rules and lastly, what steps can help navigate the tax-risk landscapes, which bring controversy in the business world.
The video highlights transparency as the highest risk associated with transfer pricing. The video discusses transparency as the primary cause of transfer pricing issues. The emergency of the demonstrating group which force many companies to disclose their trading secretes as well as their taxation files in public has led to many companies facing discrimination and scrutiny. The research shows that only a few companies have been able to comply with the PE and BEPS regulations. This becomes a challenge when the companies face pressure from the public to demonstrate their tax compliance information and rules regarding world trade organizations. The research also showed that many of the organizations were facing challenges in terms of tax due to the availability of tax compliance as required by the laws. All the issues discussed make company activities hard in conjunction with transfer pricing. There is a need for a solution to the problems faced by the companies to easen their transactions and help them deal with transfer pricing challenges. To this issue, the video provides five critical aspects for consideration in maintaining a skillful interconnected transfer pricing.
Refreshing Company’s transfer pricing evaluations’ risk profile. The research indicated a large number of respondents classifying tax as the highest risk in their transfer pricing. The next step discussed is the mitigation strategy, which, based on the survey results, is complying with the tax regulations and putting in place preparedness actions such as the implementation of intangible disclosures in compliance with the BEPS 13. The thirds strategy is developing a comprehensive response plan to transfer pricing audits at any time the actions arise. Next in keeping in mind Permanent Establishment’s emerging threats. PE is significant to tax profiles when used in a variety of rules, including tax regulations. The fifth element is the evaluation of available resources, which should be aligned with the TP as well as the IT reporting system.
From the discussed aspects, companies have been able to circumnavigate transfer pricing across the world. This has been a significant issue that has been navigated through aspect number three, with disclosures allowing the companies to present a better picture.