Intangible Business carries out transfer pricing work for groups where transactions between group entities cross international tax jurisdictions. The general basis for transfer pricing is that it needs to be on an arm's length basis. Transfer pricing can affect tax significantly and some tax authorities (particularly in the US) are becoming more and more innovative and commercial in their enquiries concerning transfer pricing. This is based on good analysis and understanding of complex business arrangements, particularly involving IP, around transfer pricing. For projects involving the US, Intangible Business applies its transfer pricing service in accordance with IRS Internal Revenue Code 482.
It is therefore becoming much more risky just to rely on a file supporting transfer pricing strategies, without too much thought to the commercial substance behind it. It is now much more advisable to have these transfer pricing strategies fully thought through and commercially benchmarked and backed up. Otherwise there could be a big and surprising tax bill coming. Intangible Business's transfer pricing service focuses on analysing and benchmarking activities in supply chains, and by researching the value drivers of the markets they serve. We have a particular focus on the value brought by IP with transfer pricing, which is often fundamentally important to transfer pricing and extends to a comprehensive analysis of the other drivers of value in the supply chain.
So multi national enterprises who are not analysing carefully their deployment of IP could have significant exposure to transfer pricing. Given the importance of IP as a commercial asset, many leading edge groups isolate and focus on developing their IP. This gives many commercial benefits, and from there a reduced exposure to a potentially huge IP transfer pricing liability. As in many situations, focusing on commercial strategy rather than reducing tax bills, is sound commercial practice anyway, as well as being socially responsible.
Intangible Business is a leader in transfer pricing advice because we have a commercial, pragmatic and market driven approach. We also have a deep understanding of value contributed by IP, an area of key importance for transfer pricing. Intangible Business also provides expert witness services for transfer pricing, see for example IP expert witness services..Transfer Pricing.