Threat looms for multinationals from transfer pricing

Multinational companies are under threat from aggressive and inconsistent
transfer pricing rules, as governments become more proactive in claiming maximum
revenues from international groups.

A survey of revenue authorities in over 30 countries by Ernst & Young
found that multinationals were facing an adversarial transfer pricing
environment in a number new countries in addition to pressure in states with
already advanced rules for transfer pricing.

‘Companies must assume that tax authorities everywhere will have a complete
picture of their global tax position, and that any steps they take in one
country will have implications across their entire operation,’ warned John
Hobster, E&Y’s global markets leader for transfer pricing service.

Hobster said that matters were further complicated by diverging
implementation of transfer pricing rules, which hindered the resolution of
bilateral disputes.

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