Operational Transfer Pricing: A holistic approach to transfer pricing governance and execution
31% of CEO’s cited tax policy uncertainty and increasing reporting obligations as a major concern to their organization growth prospects.*
Address increasing complex and time-consuming requirements and rapidly evolving finance landscape to properly execute global transfer pricing policies with limited resources.
Moving toward an holistic and strategic approach to managing your transfer pricing operations
While transfer pricing policy decisions are principally a matter for an organization’s tax team, responsibility for the actual execution of inter-company transactions is generally spread out across a broad chain of often detached internal functions and internationally spread offices.
The entire process typically involves multiple hand-offs between tax, regional/global controllership, shared services, information technology, and external advisers. In the absence of unified oversight or co-ordination, fiscally unsound conditions can develop at every transaction point. These can include:
- Ambiguities of responsibility
- Manual, informal, “ad hoc” practices
- Accounting-policy or data mismatches
- Insufficient mechanisms for reconciliation
- An overreliance on personal relationships or specific function “heroes”
- Undocumented interpretations of ambiguous terms in inter-company agreements
- Duplicated or inefficient processes
- Opaque audit trails
- Lack of transparency or understanding between functions and regions
It’s easy to see how these conditions can expose multinational organizations to significant risks, including compliance and tax risks (material errors) and gross inefficiencies - not to mention frustrations resulting from breakdowns in the execution chain.
Clearly there is a need to address transfer pricing as a more holistic, end-to-end (E2E) process, one that draws together the wider chain of activities into a well-defined set of procedures - from strategy, all the way through your financial and operational systems, to your local financial statements and tax returns.
Streamlined and controlled operational transfer pricing processes
PwC can work with you to optimize end-to-end processes for your intercompany transactions and leverage your resources, systems environment, technology options, culture and governance framework. This optimization can include:
- Meeting statutory requirements in a more timely and efficient manner
- Reducing audit risks and decreasing costs of audit defence
- Maintaining better internal tax controls
- Developing a faster close process
- Standardizing data collection processes and transfer pricing calculations
- Rationalizing IT/systems investment
- Improving cash tax management
- Performing efficient transfer pricing scenario analysis
- Reducing indirect tax compliance costs
A global, multidisciplinary team embedded in a wide variety of markets that brings practical, innovative and tech enabled solutions to our clients' operational transfer pricing challenges
PwC’s operational transfer pricing experts help organizations implement their transfer pricing policies to reduce risk, deliver efficiencies and drive better integration with other business functions.
We know how to deal with fragmented data sources and how to transform time-intensive manual processes into automated and effective TP processes.Our team brings practical, technology-enabled solutions to operational challenges.
Alongside delivering significant process efficiencies, we drive better insights and support decision making by ensuring that the process outputs enable real time monitoring and management of transfer pricing policies and provide in-depth analytics on individual transactions.
Contact us to learn more about how we can help you adopt a strategic, end-to-end approach to your transfer pricing execution.
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