The International Transfer Pricing Summit in London confirmed what a lot of MNCs around the globe already know. Transfer Pricing is a seismic issue. Everyone from policy makers and taxing authorities to FTSE 100 and Fortune 100 MNCs including OECD, HMRC, Rolls-Royce, LVMH and Shell came together this past week to focus on updates and strategies around the topic.
Thomson Reuters was among the attendees, represented by Brian Tully,VP & Head of ONESOURCE Transfer Pricing. Reporting from London, Brian shared the primary focus was on the treatment of Year End Transfer Pricing adjustments. The consensus among both speakers and attendees alike was that there’s a major need to prevent the need for these adjustments and for MNCs to take advantage of tax savings by relying on one single approach for all transfer pricing related adjustments.
What Companies Can Do
Until recently, companies had few options when they desired to review their intercompany activities on a frequent basis, and make an adjustment to ensure they were using arm’s length pricing. They could have a large staff to pull the information into Excel and spend a month or more formatting and reviewing the data; as well as sending out countless emails requesting additional data and time to track down whether the requests are received. This creates issues of risk, not only relating to transfer pricing, but also relating to the tax provision process.
Thomson Reuters realized that there’s a need for MNCs to use a single solution and created an Operational Transfer Pricing solution, which when implemented as part of an overall solution around the entire transfer pricing process; from gathering data for risk and functional analyses, to the monthly review of actual results to policy, to the final step of preparing the annual documentation; this End-to-End Transfer Pricing solution gives companies the tools to take enables companies to take control of this process.
Companies who’ve already implemented the operational transfer pricing solution have reported time savings. What used to take 5 months for an Excel analysis now takes 2 hours.