Transfer pricing is one of the most significant issues in international tax. Transfer pricing deals with the terms and prices at which related parties transfer goods and services to each other. When the parties are located in different tax jurisdictions, there is opportunity to move income to lower taxation jurisdictions. Many countries have adopted laws pertaining to transfer pricing in order to combat potential tax revenue losses.
Our tax professionals perform transfer pricing studies to determine whether the pricing of controlled transactions between related parties will survive scrutiny from the IRS and other taxing authorities. IRS regulations specify that the “best method” be adopted – meaning the testing method that is the most reliable measure of an arm’s-length transaction. A transfer pricing study will support the method selected for a particular controlled transaction. Generally, pricing studies are done to comply with IRS regulations. However, a price study can also uncover an opportunity for your company to improve future tax planning and reduce costs.
For more information on Transfer Pricing Studies, or any other questions please email us at firstname.lastname@example.org