ASK YOURSELF

  • Does the company have transaction flows between domestic and foreign affiliates involving tangible goods, intangibles, services, or funds/guarantees?

  • Has or will the company engage in any restructuring or other significant change in the organizational structure or in the supply chain or value chain?

  • Has or will the company merge, acquire or divest any business that has material cross-border transactions with affiliates?

  • Is the company currently under tax authority audit and, if so, is transfer pricing an issue? Are any of the company’s affiliates subject to transfer pricing audits by foreign tax authorities? 

  • Does the company have a contentious history of IRS or foreign tax authority audits?

  • Might the company face an allegation of illegal state aid provided by an EU member country as a result of an APA or other tax agreement?

  • Does the company understand “economic substance” and “business purpose” and can it support its profit allocation among the group? 

  • Can the company support its specific material intercompany transactions, along with transaction volumes and guiding transfer pricing policies?

  • Are the company’s intercompany contracts complete and grounded in economic reality?

  • Has the company observed any discrepancies when filling out its country-by-country reports? Can such discrepancies be explained?

  • Is the company continuing a transfer pricing system based upon a past/expired IRS agreement?

  • Is there a history of year-end transfer pricing adjustments or profits/losses on related-party transactions unsupported by benchmarking analyses?

  • Has the company experienced any goodwill, fixed asset, or other impairment for financial statement purposes?

  • What are the company’s objectives for addressing specific controversies or mitigating general transfer pricing risk?

  • Does the company have a plan for mitigating any reputational risk connected with transfer pricing?

QUALIFYING QUESTIONS FOR TRANSFER PRICING ANALYSIS

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Steven Felgran
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Larchmont - New York, United States

Cell: 917-838-5112

steven@felgran.com

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