Transfer Pricing — An Industry Perspective

To a tax adviser in industry transfer pricing will inevitably be one of the most difficult and frustrating topics that he or she has to deal with. With increasing globalisation businesses are very rarely organised on the basis of statutory entities but rather on sector lines that cross both statutory and territorial borders. Profit considerations are first the consolidated accounts and then at the sector level. End-to-end margins and costs are what are important. Absent tax people in the business therefore rarely care about the transfer price if it does not directly affect sector or group profitability. For them the need to set arm's-length transfer prices is seen as an...