Transfer Pricing Tops List Of TEI Panel's International Tax Issues

by Mike Godfrey, Tax-News.com, Washington

21 February 2008

Tax experts at a recent seminar concluded that transfer pricing remains firmly at the top of the list of the most challenging international tax issues for corporate tax departments.

This was the consensus that emerged when a group of Tax Executives Institute (TEI) members joined Thomson Tax & Accounting, a segment of The Thomson Corporation, to discuss the international tax issues on which corporate tax departments were spending the most time.

Timothy McCormally, Executive Director, TEI, commented: "Transfer pricing takes a significant amount of time and training in many of the multi-national enterprises in our membership. According to TEI's most recent Corporate Tax Department Survey, TEI's members have substantial tax planning responsibility, and in more than 80% of the cases, our members have significant responsibility for planning with respect to transfer pricing."

"Moreover, as several TEI panelists confirmed, the panelists do expect transfer pricing to get more scrutiny in countries around the world."

Linda Scheffel, Thomson Tax & Accounting Vice President, observed that: "The US transfer pricing regulations have always been a challenge, even for experts like TEI's members. Add to those issues non-US regimes with practices such as non-public comparables as well as complex new accounting rules (e.g., FIN 48), and transfer pricing can eat up the time and overwhelm the resources of corporate tax departments."

Scheffel added: "TEI panel participants indicated that the following transfer pricing issues were among their most time consuming: non-US transfer pricing issues; US transfer pricing issues; secret comparables; maintaining the documentation levels necessary for multiple regimes; and coordination of internal and external resources working on transfer pricing."

TEI is the preeminent association of business tax executives in North America, with 7,000 members representing 3,200 of the leading corporations in the United States, Canada, Europe, and Asia.

TEI represents a cross-section of the business community, and is dedicated to developing and effectively implementing sound tax policy, promoting the uniform and equitable enforcement of the tax laws, and reducing the cost and burden of administration and compliance to the benefit of taxpayers and government alike.

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