Multinational enterprises are typically engaged in the transfer of goods, intangibles and services with affiliated companies. To determine tax liability in each tax jurisdiction (e.g., U.S. vs. foreign), a defensible, arm's length transfer price has to be determined and applied. Transfer pricing involves the process of determining the appropriate price one related-party charges another.
Because of certain “high profile” court cases and IRS audits involving transfer-pricing issues, multinational enterprises recognize the need for a transfer pricing analysis to support the amounts charged between related parties. To learn more, please contact Dennis Petri or Bill Kingsley.
to make sure all of their tax and accounting reporting is telling a consistent story with their transfer pricing. Otherwise, inconsistency could flag an IRS or foreign tax authority audit.
Two hot areas of transfer pricing for consideration are intercompany loans and cash pooling. These two intercompany financing transactions are used by most multinational entities (MNEs) and are being targeted by the IRS and global tax authorities. Yet, most intercompany loans remain undocumented and have commercial terms that would not meet the required transfer pricing standards.
If you have any foreign assets that have not been reported to the Internal Revenue Service (IRS), it is imperative that you take action now!
The Internal Revenue Service recently announced that the agency will waive certain late payment penalties pertaining to Section 965 of the Internal Revenue Code.
The newly enacted Tax Cuts and Jobs Act (the "Act") gave us what some people refer to as "mandatory repatriation" for previously untaxed foreign earnings of specified foreign corporations. In other words, Section 965 of the Internal Revenue Code now requires some taxpayers to pay tax on the untaxed foreign earnings of certain foreign corporations as if the earnings had been repatriated to the United States. This will take effect for the 2017 tax year for a majority of taxpayers.