Transfer pricing has been a factor in the growth of the specialist consultancy CRA International. In the fourth quarter, transfer pricing as a source of income for the business grew by 35% compared with Q4 2006.
The business, which acquired leading TP consultancy Ballentine Barbera in 2006, told TP Week that its 14% fourth quarter growth was driven by four practices including transfer pricing.
The head of CRA's transfer pricing practice, Robert Alltop,(pictured), told TP Week: “The integration of Ballentine Barbera has added breadth and depth to our transfer pricing coverage. We are seeing considerable demand from US taxpayers on issues related to FIN 48 and in Europe over the extent and complexity of regulations.”
Alltop says that clients are consulting the practice at a strategic level as much as for operational and fulfilment assignments . He says that transfer pricing is a cyclical business at least in the US. Many of CRA’s US clients are working towards the end of calendar year there is a lot of work in the second half.
CEO James Burrows commented: “During the fourth quarter, the company also received a significant one-time benefit from its former majority-owned NeuCo subsidiary in which CRA currently maintains a 36% interest. In early November, NeuCo received $10 million in connection with the licensing of intellectual property rights. CRA’s after-tax benefit was approximately $2.1 million, or $0.18 per diluted share.”
In Q2, the company concluded an advanced pricing agreement (APA) with the Internal Revenue Service and the UK's Revenue & Customs. This APA created a $1.4 million net tax benefit for the company.
