Deloitte’s TP controversy guide: Prevention and resolution

Click here to read Deloitte's TP controversy guide 2022.

The initial impact of the COVID-19 pandemic on multinational enterprises (MNEs) may have eased, but it is still far from smooth sailing for companies. Disruptions to supply chains, desperate demand for labour, and the resulting shortages of particular pieces or products have continued, while the Russia–Ukraine war and a global energy crisis add to the turbulence.

In this landscape, MNEs are finding it increasingly difficult to protect their TP strategies from the audits that tax authorities have started to resume. Mutual agreement procedures (MAPs) and advance pricing agreements (APAs) play their part in reducing uncertainty, but backlogs are affecting MNEs’ access to these options.

Meanwhile, tax authorities continue to benefit from increased access to company data, which puts MNEs under growing pressure to ensure there are no flaws in their strategies or data.

In light of this uncertainty, Deloitte’s transfer pricing experts share their advice on the following topics:

• The importance of documentation that demonstrates pricing in accordance with the arm’s-length principle;

• BEPS-related guidance regarding profit split methods and financial transactions;

• APAs in India and China, which have both expanded the availability of this option;

• The risk of controversy in the automotive and media sectors;

• How the post-COVID-19 working environment is affecting TP strategy;

• The relationship between TP and environmental, social, and governance (ESG) measures put forward by bodies including the OECD and EU;

• Trends between audits and litigation, and the growing body of TP case law; and

• The arbitration of tax treaty disputes, including under MAPs.

In an uncertain environment, Deloitte’s insights can help in-house tax managers at MNEs to navigate the risks and maximise any opportunities for their company that have arisen from recent changes to the TP landscape.

Click here to read Deloitte's TP controversy guide 2022.