Global Transfer Pricing Strategies

Increasing tariffs signify a substantial shift in global trade policy, creating uncertainty for Multinational Enterprises (MNEs). Companies need to take strategic action to understand their supply chains like never before so they can assess and mitigate the impact of tariffs. The global trade and tariff landscape is continuously evolving, and it’s imperative to stay informed about changing tariff rates by country, industry, and product involved. While this creates uncertainty for MNEs, Withum’s Global Transfer Pricing Strategies and Global Trade and Tariffs Consulting Team can assist your business in taking a practical and strategic approach to understanding and implementing your options today.

Service offerings include:

• Options for mitigating tariff impact, including potentially minimizing dutiable customs value by unbundling true product costs from any other non-dutiable costs (services, etc.) that may currently be in COGS.
• Consideration of alternatives to eliminate, mitigate, or defer customs payments, such as first sale for export, bonded warehouses, free trade zones, duty drawbacks, and customs reconciliation programs.
• Global tax and transfer pricing strategies focused on ensuring/creating the most efficient entity structure and physical flow of products to mitigate negative financial impact of tariffs and reduce transfer pricing risk.
• Strategic supply chain planning, including diversification of vendors, nearshoring manufacturing facilities, creating new distribution channels for products currently entering the U.S. but destined for customers in other markets.
• Financial scenario modeling to understand the impact of changing product pricing, tariff amount, and sharing of increased tariff costs.
• Understanding and mitigating the adverse ripple effect through the entire global business, including lower profitability/taxable income leading to increased transfer pricing risk/exposure and potential for double taxation.
• Assistance with modernizing a company’s manual invoicing/customs calculation methods and replacing them with an automated process that reduces costly errors.

Withum can educate and advise global business strategic leaders on navigating this new global trade and tariff environment and assist in creating an actionable plan to drive decision-making using our proprietary scenario modeling tool and step plan.

Schedule a 30-minute tariff impact assessment today.

Transfer pricing is the most significant tax uncertainty for multinationals. Withum provides transfer pricing advisory services to establish intercompany pricing consistent with the arm’s length standard for clients ranging from startups just expanding globally to mature, established global businesses. Taking a fresh look to assess the health of your transfer pricing strategy ensures an optimal global structure that minimizes transfer pricing risk around the world.

Withum provides economic analyses and documentation reports to comply with US Section 482 Regulations, OECD Guidelines, and foreign jurisdiction regulations. Preparing this annually at the time of the tax return filing is the key to both minimizing the steep 20% to 40% penalties of US Section 6662 Regulations and maximizing your best negotiating position.

Withum performs economic benchmarking analyses for those firms that require a lighter touch approach to transfer pricing. This transfer pricing approach is consistent with the arm’s length standard and is delivered in a manner that is less consuming than full documentation, yet ensures you have the right transfer pricing to use in your accounting systems.

Proactive review of a company’s global operations from a transfer pricing and international tax perspective is key to ensuring multinational corporations operate in the most tax-efficient manner. The combined expertise of Withum’s transfer pricing and international tax professionals bring a two-phased discovery + design and economic analyses implementation approach to optimize your global structure. In addition, Withum’s professionals collaborate with transfer pricing and tax professionals around the globe through the HLB International network to provide local market expertise.

Withum’s professionals provide tailored economic consulting services to address pain points and identify opportunities. From microeconomic support to macroeconomic solutions, the transfer pricing group works to add value in every situation.

Withum transfer pricing professionals are well versed in global initiatives, such as the OECD’s Base Erosion and Profit Shifting (BEPS) guidance. This includes preparation of Master Files, Local Files, and Country-by-Country Reporting (CbCR) for those MNEs that meet individual country thresholds.

Withum professionals have successfully represented clients in transfer pricing matters.

• Representation with the IRS, State Tax Authorities, and Foreign Tax Authorities
• Oral and written responses to Information and Data Requests (IDRs)
• Counter-analyses to Tax Authority Notice of Proposed Adjustments (NOPAs)
• Economic analyses to support legal proceedings in Tax Court
• Advance Pricing Agreements (APAs) to negotiate and solidify future transfer pricing
• Competent Authority negotiations to avoid double taxation

• Planning: Establishing transfer pricing risk mitigation and achieving global tax efficient planning
• Documentation: Ensuring annual compliance with U.S., OECD and Local Country Regulations
• Economic Analyses: Determining arm’s length pricing for accounting purposes
• Global Tax and Transfer Pricing Strategies: Establishing optimal global structure
• OECD BEPS Compliance: Preparing appropriate documentation including Master Files, Local Files, and CbCR
• Controversy and APA Negotiations: Assisting with audit defense and prospective transfer pricing positions

• Domestic Transfer Pricing: Creating transfer pricing strategies for state and local planning
• Cost Allocation Studies: Developing tax efficient strategies for intercompany allocations consistent with regulations
• Transaction Advisory Transfer Pricing Diligence: Cultivating optimal positions for both buy side and sell side perspectives
• Review of Intercompany Legal Agreements: Co-developing support for related party contracts and positions
• Operational Transfer Pricing: Implementing pricing and policies in systems consistent with transfer pricing documentation
• Protection of Intellectual Property: Developing preferred structures and strategies to support intangible property defense
• Cash Flow Management: Analyzing multiple initiatives and positions to strengthen flow of funds through the enterprise