Friday, June 3, 2011

Navigating the Aftermath of a Transfer Pricing Allocation

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With increased governmental audit resources, new regulations, and better access to information by fiscal authorities worldwide, the incidence of transfer pricing controversy is expected to increase substantially in coming years. Despite a growing array of dispute resolution alternatives, it is likely that the increasing number of transfer pricing examinations, both U.S.- and foreign-initiated, will result in an increasing amount of sustained transfer pricing adjustments. Taxpayers should not only be aware of the federal tax implications of a transfer pricing adjustment, but also the potential impact on customs duties and state tax outcomes.

In a special report for BNA's Transfer Pricing Report, Steven C. Wrappe and Kenneth P. Christman Jr. of Ernst & Young in Washington, D.C., analyze the three types of transfer pricing adjustments: primary adjustments, correlative adjustments, and conforming adjustments. They  review the non-transfer pricing U.S. federal tax implications and the customs and state tax implications of a sustained adjustment. E&Y practitioners in Canada, Germany, Japan, the Netherlands, and the United Kingdom describe the mechanism for obtaining correlative adjustment in those nations.

Sign up to access the special report as well as all of BNA Tax Management Transfer Pricing Report coverage at http://www.bnatax.com/Transfer-Pricing-Report-p7899/ 

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