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Archive for Guy Sanschagrin

Learn How Multinational Corporate Tax Executives Are Taking Control Of Transfer Pricing Remotely

TRANSPORTAL- Transfer Pricing Software

It goes without saying that the COVID-19 pandemic is the major concern of nearly all multinational enterprises (MNEs) at the moment. Radical containment measures continue to be put in place by governments around the world in efforts to slow the spread of the virus. Many of these measures center on the concept of ‘social distancing’ and have included closing businesses and organizations, cancelling events, prohibiting international and domestic travel, and quarantining cities and even regions. COVID-19 containment measures have disrupted business as usual, from manufacturing plant shutdowns to creating information inefficiencies and collaboration challenges at MNE headquarters and across global entities. These business disruptions create challenges for effectively managing transfer pricing information and workflows.
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A New Paradigm: Global Transfer Pricing Management Organizes All Documentation And Master Files

Transfer Pricing Software - Trans-Portal

Companies need a “portal” that enables them to streamline their processes and organize their global transfer pricing documentation. Such a tool should make it easy for the MNE to facilitate worldwide collaboration among professionals within the company and among its advisors by incorporating project management tools, tracking capabilities and communication across the globe. We have introduced Trans-Portal, a comprehensive solution with features designed to:

  • Organize global transfer pricing documentation
  • Collect data, perform research and analyze transfer pricing risks
  • Update transfer pricing documentation (Master and Local files) efficiently
  • Collaborate with colleagues across the globe to coordinate joint efforts
  • Validate transfer pricing documentation by transfer pricing specialists

Trans-Portal’s purpose is to fulfill these fundamental needs. This intuitive, easy to use solution is designed to meet the market’s appetite for support to automate data collection; organize transfer pricing documentation such as the master file and local files, benchmarking studies and intercompany agreements; and manage transfer pricing risks. At the same time, Trans-Portal enables global teamwork both within the enterprise and with the company’s external service providers.

Tour Trans-Portal To Manage Transfer Pricing Documentation

 

Transfer Pricing Documentation Made Easy Through Trans-Portal

Managing Transfer Pricing Documentation Through Trans-Portal

Companies need a “portal” that enables them to streamline their processes and organize their global transfer pricing documentation. Such a tool should make it easy for the MNE to facilitate worldwide collaboration among professionals within the company and among its advisors by incorporating project management tools, tracking capabilities and communication across the globe. We have introduced Trans-Portal, a comprehensive solution with features designed to:

  • Organize global transfer pricing documentation
  • Collect data, perform research and analyze transfer pricing risks
  • Update transfer pricing documentation (Master and Local files) efficiently
  • Collaborate with colleagues across the globe to coordinate joint efforts
  • Validate transfer pricing documentation by transfer pricing specialists

Trans-Portal’s purpose is to fulfill these fundamental needs. This intuitive, easy to use solution is designed to meet the market’s appetite for support to automate data collection; organize transfer pricing documentation such as the master file and local files, benchmarking studies and intercompany agreements; and manage transfer pricing risks. At the same time, Trans-Portal enables global teamwork both within the enterprise and with the company’s external service providers.

Make Transfer Pricing Documentation Easy

Tour Best Way To Handle Transfer Pricing Documentation

Looming Transfer Pricing Exams & IRS Preparedness Measures (Part 3 of Series): “TPEP Execution Phase”

Doug Schwerdt

In this third article in our Looming Transfer Pricing Exams & IRS Preparedness Measures series, we highlight and summarize the essential aspects of the IRS’s Transfer Pricing Examination Process (TPEP) Execution Phase.

The Execution Phase immediately follows the opening conference and consists of continued risk assessment, fact finding, information gathering, and issue development. Stages of issue development include determining the facts, applying the law to those facts, and understanding the various tax implications of the issue. The issue team is advised to make every effort to resolve factual differences with the taxpayer.

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Transfer Pricing Has Been Cited By IRS As One Of Their Most Important Enforcement Priorities

Transfer Pricing Has Been Cited By IRS As One Of Their Most Important Enforcement Priorities

TaxConnections Reposts An Important Article: What To Expect When You Are Expecting A Transfer Pricing Examination

Transfer pricing examinations can be unpleasant experiences for taxpayers. Chances are, an international business in the U.S. – whether it is headquartered in the U.S., or a subsidiary of a foreign parent – is going to have its transfer pricing examined by the IRS or another tax authority.

Transfer pricing has been cited by IRS officials for years as one of their most important enforcement priorities. But as a direct result of BEPS (the OECD’s Base Erosion Profit Shifting project), tax authorities around the world are actively engaged in the process of revising and tightening their expectations and requirements with respect to transfer pricing. The prospect of thorough and detailed examinations of taxpayers’ transfer pricing positions is growing every day.

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Looming Transfer Pricing Exams & IRS Preparedness Measures (Part 2 of Series): “TPEP Planning Phase”

GUY SANSCHAGRIN

In this second article in our Looming Transfer Pricing Exams & IRS Preparedness Measures series, we highlight and summarize the essential aspects of the IRS’s Transfer Pricing Examination Process (TPEP) Planning Phase.

The Planning Phase determines the scope and issues of the transfer pricing examination. The TPEP states, “Issues selected for examination should have the broadest impact on achieving compliance regardless of the size or type of entity.” Important steps in the Planning Phase are: 1) the Initial Transfer Pricing Risk Assessment, 2) issuance of the Initial Transfer Pricing Information Document Request (IDR), 3) IRS internal planning meetings, 4) development of the exam plan, timelines and milestones, and 5) the opening conference, which is the final step of the Planning Phase and marks the transition to the Execution Phase.

Evolving Guidance
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Looming Transfer Pricing Exams & IRS Preparedness Measures (Part 1 of Series)

Transfer Pricing Examination Process: Are You Prepared?

The IRS guidance, Transfer Pricing Examination Process, Publication 5300 (TPEP), released in June 2018, is more relevant now than ever before. There is a broad consensus among transfer pricing and international tax practitioners that tax authorities around the globe will step up transfer pricing audit activity within the next year as a means to recoup lost tax revenue resulting from the pandemic-induced recession. Fortunately, for US-based entities in multinational enterprise (MNE) groups, the IRS has in recent years issued taxpayer guidance on how to prepare for transfer pricing examinations. This series of blog articles is structured to help tax executives quickly get up to speed with the IRS’s guidance on transfer pricing examinations and its expectations on documentation.

In this first installment we introduce the TPEP. The next three installments of this series highlight and summarize the essential aspects of the three TPEP Phases: Planning, Execution, and Resolution. Subsequent installments examine how the TPEP diverges from the Transfer Pricing Audit Roadmap, its predecessor guidance, and provide TPEP insights in the form of useful takeaways. Saving the best for last, the concluding article of this series will focus on the IRS’s most recent transfer pricing guidance, FAQs re Transfer Pricing Documentation Best Practices.

TPEP Primer

IRS transfer pricing examinations can be unpleasant experiences for taxpayers. Chances are, an international business in the U.S. – whether it is headquartered in the U.S., or a subsidiary of a foreign parent – is going to have its transfer pricing examined by the IRS at some point. Transfer pricing has been cited by IRS officials for years as one of their most important enforcement priorities. But as a direct result of the OECD’s Base Erosion and Profit Shifting (BEPS)1 project, tax authorities around the world are actively engaged in the process of revising and tightening their expectations and requirements with respect to transfer pricing. The prospect of thorough and detailed examinations of taxpayers’ transfer pricing positions is growing every day.
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What To Expect When You Are Expecting A Transfer Pricing Examination

What To Expect When You Are Expecting A Transfer Pricing Examination

Transfer pricing examinations can be unpleasant experiences for taxpayers. Chances are, an international business in the U.S. – whether it is headquartered in the U.S., or a subsidiary of a foreign parent – is going to have its transfer pricing examined by the IRS or another tax authority.

Transfer pricing has been cited by IRS officials for years as one of their most important enforcement priorities. But as a direct result of BEPS (the OECD’s Base Erosion Profit Shifting project), tax authorities around the world are actively engaged in the process of revising and tightening their expectations and requirements with respect to transfer pricing. The prospect of thorough and detailed examinations of taxpayers’ transfer pricing positions is growing every day.
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Deferred DISC Income – How Does It Work?

This is one of the most misunderstood provisions in the IC-DISC area. An IC-DISC shareholder is required to pay an interest charge to the IRS on the tax liability related to the deferred DISC income, so this concept is important and, as stated above, greatly misunderstood. The three most misunderstood concepts are i) what is “deferred DISC income at the end of the computation year”, ii) how are the IC-DISC earnings and profits distributed, and iii) in what order are DISC earnings distributed?

This is one of the most misunderstood provisions in the IC-DISC area. An IC-DISC shareholder is required to pay an interest charge to the IRS on the tax liability related to the deferred DISC income, so this concept is important and, as stated above, greatly misunderstood.

The three most misunderstood concepts are i) what is “deferred DISC income at the end of the computation year”, ii) how are the IC-DISC earnings and profits distributed, and iii) in what order are DISC earnings distributed?

First let’s examine the definition of deferred DISC income at the end of the computation year. This is defined in the regulations as the accumulated DISC income at the end of the prior year. It is not the accumulated DISC income at the end of the current year. The deferred DISC income is always computed on a one-year lag basis.

For instance, a brand-new IC-DISC can’t have deferred DISC income at the end of its first year.
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ALERT: Now Is Not The Time To Ignore Transfer Pricing

SCOTT SMAISTRLA

COVID-19 necessitates a reassessment of the existing transfer pricing paradigms of Multinational Enterprises (MNEs). Virtually all industries will be adversely affected by the global COVID-19 pandemic. In addition to the impact of a global recession, there will be disruptions to supply chains and reductions in consumer demand. MNEs will face new challenges such as enabling personnel to work remotely and relocating personnel across borders at a time when movement is restricted by governments. These disruptions will erode the profit margins for many companies, potentially requiring MNEs to make significant adjustments to operating returns for the fiscal periods impacted by the COVID-19 pandemic.

In addition, we can anticipate that transfer pricing audits will surge in tax years where MNE profit margins have been adversely affected by COVID-19. MNEs must be prepared to explain to tax authorities that their transfer pricing arrangements were arm’s length during this period and that the unique and extraordinary adverse factors associated with COVID-19 caused unexpected losses. This discussion is especially important if the MNE’s transfer pricing policy is based on any entities in the chain achieving set target profit margin(s) that they will not achieve due to the adverse economy. It is essential for MNEs to document their transfer pricing arrangements now, including a discussion of the key factors to prepare for possible audits covering the COVID-19 tax years.
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Maintain Corporate Transfer Pricing Processes Remotely

How To Maintain Corporate Transfer Pricing Processes Remotely

Companies are instructing whole departments to work from home, and the traditional workplace is increasingly reserved for jobs that cannot be performed remotely. This presents challenges for MNEs, especially at the headquarters level, such as keeping information and workflows organized, and maintaining effective communication and collaboration between stakeholders and ‘gatekeepers’ in different departments of global entities.

These challenges are pronounced in MNE transfer pricing teams due to the global nature of intercompany transactions and the local country functions, assets and risks, which are the factual foundation for analyses. Transfer pricing processes require a large amount of information that is commonly housed in disparate IT systems, databases, and in the minds of key personnel (and often on their local hard drives). If demand continues to weaken, companies will increasingly shed workers, and sooner or later this could lead to the loss of knowledge and information that is critical for maintaining effective transfer pricing processes and documentation. MNEs would be wise to think about and invest in transfer pricing information and process management systems, since these effectiveness-improving systems increasingly act as continuity management systems -especially in the current climate.
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Learn How To Remotely Maintain Transfer Pricing Using Transportal

Maintain Transfer Pricing Remotely Using Transportal

As organizations learn how to set up management of their global transfer pricing remotely, they are quickly moving to Transportal. This software as a service management platform provides a comprehensive solution to: Organize global transfer pricing information in one place; Collect data, perform research and analyze your transfer pricing risks; Update your transfer pricing documentation (Master and Local Files) efficiently; Collaborate with colleagues across the globe to coordinate joint efforts; Validate transfer pricing documentation by transfer pricing specialists.

This transfer pricing software manages risks by following the OECD Transfer Pricing Guidelines and complying with local requirements. This software makes it easy for corporations and consultants to collaborate online from a single dashboard and deliver transfer pricing service and support. Request a demo today at http://www.trans-portal.com/product.html

Have a question? Contact Guy Shanschagrin.