2010 Global Transfer Pricing Survey. Addressing the challenges of globalization
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20 Aprilie 2011 |
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Transfer pricing remains a key tax challenge for the world's leading companies. That's the major observation from our latest Ernst & Young survey of tax directors and international tax practitioners.
And with good reason. Faced with a slowly recovering global economy and record deficits, governments are increasingly focused on raising revenues through taxation. As a result, more and more jurisdictions are ramping up their enforcement efforts — not only in developed nations but also in many emerging markets such as China, India, Russiaand Brazil.
At the same time, the Organisation for Economic Co-operation and Development (OECD), whose work largely defines the transfer pricing rules adopted by member nations, continues to refine and update its transfer pricing guidelines. In 2010, among other initiatives, the OECD issued a thorough update of its guidance on comparability and profit methods.For 2011, the OECD is shifting its transfer pricing focus to better defining the issues surrounding intangibles such as trademarks, patents and even business models. The OECD will be issuing guidance, hopefully within the next few months, that will form the basis of many governments' attitudes in dealing with these difficult subjects.
This year also saw the publication of the OECD's new chapter on business restructurings and its new report on the attribution of profits to permanent establishments. Most global businesses, in the face of mounting pressure to improve profitability, have been undertaking some form of cost reduction or business change program. In many cases, this process includes substantial changes to everything from strategic planning to supply chain. Each and every business change brings with it transfer pricing implications.
Since 1995, Ernst & Young has surveyed multinational enterprises (MNEs) on international tax matters with special emphasis on what continues to be a leading international tax issue — transfer pricing. The ever-increasing scope of our transfer pricing research reflects the growing number of countries that devote attention to transfer pricing. This is noted through increased enforcement and regulatory activity, as well as the increasing variety of transfer pricing issues facing MNEs.
For this survey, we commissioned Consensus Research International to conduct a series of independent interviews of 877 MNEs across 25 countries. The resulting report summarizes the transfer pricing practices, perceptions and audit experiences of a wide range of global corporate tax practitioners. The survey provides insights into how MNEs are dealing with the myriad of economic, regulatory and fiscal changes taking place around the world. For the first time, our survey queries MNEs on their business restructuring activities, an area in which many of our clients express keen interest.
Executive summary
Importance of transfer pricing
Transfer pricing is one of the key tax issues today — it is actually more important today than it was two years ago.
Audit experiences
Transfer pricing audits are increasing in significance, intrusiveness and scope.
Controversy management
Litigation remains infrequent — but is on the rise. Meanwhile, the use of and degree of comfort with APAs are increasing — while experience with new arbitration processes remains extremely limited.
Trends in transfer pricing issues and approaches
Enforcement actions are placing greater emphasis on intercompany financing transactions and service transactions.
Taxpayer approaches
Taxpayers are taking a more coordinated and globalized approach to transfer pricing documentation.
Tax and efficient supply chain management
Tax considerations relating to business restructuring are expected to become more important in the coming years.
