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Transfer Pricing is typically one of the most significant tax issues for multinational groups.
This is due to its subjectivity and the increasing concern of tax authorities worldwide to ensure profits are not inappropriately shifted through non-arms length pricing.
In many jurisdictions, this has been exemplified by tax authority scrutiny of a number of arrangements, including particularly intellectual property, financing, procurement/marketing hub arrangements, and a continued general focus to ensure that they are not missing out on their "fair share" of the overall value chain's profits.
However, Transfer Pricing risks cannot be considered simply from the perspective of one jurisdiction: adopting a conservative position in one jurisdiction will put pressure on transfer pricing risks in other jurisdictions.
As such, a holistic and balanced approach is required - as well as the exercise of sound professional judgment and expertise.
Our approach to managing risk
In light of this context, RSM's approach is to assist multinationals in establishing a transfer pricing policy that is "fit for purpose", so the global value chain is remunerated appropriately and the support for this is appropriately documented.
- Reducing or potentially eliminating the exposure to penalties from an adverse transfer pricing adjustment;
- Providing a basis upon which groups can demonstrate they have complied with accounting standards relating to "uncertain tax positions", particularly AASB Interpretation;
- Significantly reducing the internal work that would otherwise be required, in the event of tax authority audit if no documentation was available;
- Evidencing sound corporate governance.
Our capabilities
RSM’s approach seeks to identify the optimal way to achieve these objectives, whilst ensuring an appropriate balance between managing transfer pricing risks and incurring costs to do so.
- Conducting risk assessments of existing Transfer Pricing arrangements
- Advising on different Operating Models and their effectiveness/appropriateness
- Preparing Transfer Pricing policy frameworks
- Transfer Pricing policy implementation support services, including cost allocation studies
- Preparing Transfer Pricing documentation
- Managing Country-by-Country Reporting compliance obligations
- Preparing Business Restructuring "support files" to substantiate restructurings
- Reviewing legal agreements to ensure legal form aligns with economic substance, including cost sharing agreements
- Assisting in seeking Advance Pricing Arrangements with tax authorities
- Assisting in responding to tax authority reviews
COVID considerations
With specific regard to the impact of COVID, we are also equipped to advise clients as to how they can legitimately vary their intra-group arrangements in order to share the impact of any disruption in financial performance, and to facilitate the preservation of cash.
KEY CONTACTS
Liam Delahunty leads the International Tax and Transfer Pricing practice at RSM Australia. With over 20 years of experience, Liam has overall responsibility for providing transfer pricing and international tax compliance and advisory services to RSM Australia’s clients.
Danielle Sherwin is a leader in the International Tax and Transfer Pricing practice at RSM Australia. Her wealth of experience spans over a decade, during which she has assisted a diverse range of clients, from large multinationals to SME taxpayers venturing overseas for the first time.
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