Transfer Pricing – the practice of charging prices for the supply of goods or services to a related entity (usually wholly owned) in such a way as to repatriate profits or affect tax or duty bills in your favor.

Generally, international transfer pricing and tax planning experience has been obtained from working for major financial institutions while assigned to large multinational corporations.

You can rely on a credible transfer pricing study for the following:

• The U.S. transfer pricing regulations, under IRS §482 of the Internal Revenue Code, require that inter-company transactions be priced under the same terms that would have existed had the transactions taken place between unrelated entities. Similar regulations now exist in virtually every developed nation around the world.

• Any business entity operating in more than one country likely has inter-company transactions involving the exchange of tangible property, intangible property or services.

The Importance of Transfer Pricing

• Corporations are facing more frequent examinations in non-US locations, as tax authorities throughout the world have placed more emphasis on transfer pricing. This has resulted in larger and more frequent adjustments to transfer pricing as well as double taxation. Where firms do not have studies, the cost to defend against a transfer pricing adjustment can be high, and the firm faces the risk of additional penalties in some locations, such as the United States. Even in the best-case scenarios, complying with transfer pricing regulations and handling transfer pricing challenges can tie up important firm resources and cost far more than having a transfer pricing study done in advance of an examination.

What to expect:

• Experienced professionals provide economic consultation and advice in connection with the analysis of complex transactions and business arrangements.
 
► Acquisition Searches and Pricing – to the extent you require assistance, you should have a Trusted Business Advisor find and price the acquisition of a business. Such services may include:
 Searching and assisting you in locating and determining appropriate values to be paid for a target business.

 Setting criteria in terms of location, price range, industries and size of operation.

 Analyzing your financial situation to recommend the most appropriate business and deal structure.

 Providing financial advice to management regarding negotiations with third parties and number of financings, structure, terms and conditions, and tax implications.

 Assisting you in presenting your CBM to various third parties.

 Meeting with various third parties to assess the feasibility and terms of proposed transactions.

What to expect:

The preparation of a comprehensive informational package (the “Confidential Business Memorandum” or “CBM”), in order to present you and your company in the most favorable light as possible to Targets, banks, intermediaries and other third parties. Your CBM should be prepared in a way that best shows the strengths of your business.

Have a question? Contact Michael Gilburd.