The Marcum 2016 Year-End Tax Guide continues our tradition of providing timely tax guidance for the upcoming year.
The IRS, OECD and taxing authorities from developed and developing countries have ramped up enforcement efforts with renewed focus on multinational enterprises' ("MNEs") transfer pricing policies.
In 2013, the G20 Leaders endorsed the OECD's two year plan to address base erosion and profit shifting ("BEPS"), particularly with respect to MNEs. As of 2014, the BEPS Project included revised standards for transfer pricing documentation and a template for country-by-country reporting which is recommended to be adopted by MNEs with a turnover in excess of 750 million and is expected to start for fiscal years beginning on or after January 1, 2016. The IRS has suggested it may follow similar reporting requirements on the same timeline as that recommended by the OECD. MNEs need to be prepared to document and defend the transfers of property, services and intangibles among affiliated entities in this changing regulatory environment, whether under existing regulatory requirements or the new BEPS recommendations.
- Implementation of Transfer Pricing Policies
- Documentation of Transfer Pricing and Audit Defense
- Documentation of OECD and Other Foreign Transfer Pricing
When MNEs initiate global intercompany transactions, they need to establish pricing for those transactions.
The transfer pricing methodology that an MNE implements should reflect a reasonable return to the parties of the transactions based upon the functions performed, risks assumed and assets utilized. Marcum can assist by preparing benchmark reports that identify comparable transactions to support an arm's length pricing methodology. In addition, Marcum can advise on the implementation of intercompany agreements and other documentation to support the transfer pricing policies.
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