While multinational corporations may face transfer pricing exams at any time, the IRS’s track recording during litigation was less than stellar, leading multinationals to adopt the practice of producing rollover documents on transactions and kept relatively modest reserves if their positions were ever questioned. That has changed in the last three years, with the IRS achieving unprecedented success in transfer pricing cases.
Grant Thornton’s Steven Wrappe, in an article for Bloomberg Tax titled, “Call to Action for U.S. Transfer Pricing Compliance,” outlines how multinationals should re-evaluate their strategy on transfer pricing compliance, including assessing function and risk analyses, consistency in methods and profitability and determine any COVID-based operations changes which may impact transfer pricing.
Read the article here.
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