Dr. J. Harold McClure

Dr. McClure has over 17 years of transfer pricing and valuation experience and currently holds the title of Senior Manager for ONESOURCE Transfer Pricing. He began his transfer pricing career at the Internal Revenue Service in San Jose, California and has worked for some of the Big Four accounting firms as well as a litigation support entity. Dr. McClure has assisted multinational firms with both U.S. and foreign documentation requirements, IRS audit defense work, and preparing the economic analyzes for bilateral and unilateral Advanced Pricing Agreements. Dr. McClure has also assisted clients with both international and multi-state tax and transfer pricing planning work. These planning projects have included the valuation of transferred intangible assets, the determination of arm’s length royalty rates, intercompany loan rates, intercompany lease rates, and the analysis of a related party distributor’s gross margin under a market share strategy. Dr. McClure has also worked on several projects that evaluated the interplay between transfer pricing and the valuation of a subsidiary. In his role as a Senior Manager at KPMG, Dr. McClure was responsible for the quality review of numerous reports from around KPMG’s U.S. practice. Dr. McClure was also responsible for the transfer pricing aspects of the FIN 48 review for many of KPMG’s audit clients. Finally, Dr. McClure worked with KPMG’s merger and acquisition team on the tax due diligence for its clients. Dr. McClure taught economics at the graduate and undergraduate level before his transfer pricing and valuation career. He had published several academic and transfer pricing papers including the OneSource White Paper on Intercompany Loans as well as “Alternative Approaches to Determining an Arm’s Length Royalty”, IDEA: The Journal of Law and Technology, Volume 43, 2002.

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UK’s DPT Challenge to Glencore – Can One Defend 80 Percent of the Profits for 20 Percent of the Functions?

Saumyanil Deb and I noted that the UK Diverted Profits Tax should allow taxpayers a chance to defend its intercompany pricing based on a reasonable model of the intercompany transaction in question. In an earlier paper, I posed a simple model of the appropriate gross margin for a sales affiliate, which we applied to the … Read More

Documenting Intercompany Interest Rates: Using Dealscan and Corporate Bond Data

A recent LinkedIn transfer pricing discussion provided an odd answer to a reasonable question about practitioners’ experiences with Dealscan. An attorney at a Big Four accounting firm wrote: I would be concerned that these reported prices do not fully reflect an arm’s length price because often times these banks will lend at a lower rate … Read More

Valuing Gilead’s Intangibles in Light of the Altera Aftermath

Taxpayers are free to structure their intercompany transactions as they wish if the intercompany pricing is consistent with the arm’s length standard. Any evaluation of a transfer pricing issue depends on what the fundamental question is. In my view, the IRS lost Altera because it was asking the wrong question. In this blog, we will … Read More

Evaluating Intercompany Royalty Rates: Why Agree with the IRS Preferred Method?

Imagine a U.S. parent that licenses certain technology to a Canadian affiliate which generates significant profits. While this sounds like good news from a business perspective, the IRS habit of assuming that the royalty should represent all of these residual profits could cause double taxation problems. Interestingly, many economists and the latest from the OECD … Read More

The UK Bareboat Charter Measure and the Arm’s Length Standard

Drilling rig multinationals often place ownership of their key assets – drilling rigs – in tax haven affiliates, which often lease this property to operating affiliates at lease rate around 14 percent of the value of the rigs.  The UK government argues that these intercompany lease rates are generous and result in … Read More

OECD on Comparability Data for Developing Nations – Cart Before the Horse?

The OECD recently released their draft paper titled Transfer Pricing Comparability Data and Developing Countries, which asks several important questions.  As I read this document, my two questions were: Is the OECD’s apparent call for having the choice of transfer pricing methodology being dependent on the nature of available data putting the cart … Read More