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Managing transfer pricing risks with advance pricing agreements

  • IFRS - Deloitte Image

Jul 08, 2021

On July 8, 2021, Deloitte USA issued a tax@hand article relating to managing transfer pricing risks with advance pricing agreements (APAs).

Transfer pricing enforcement activities are expected to increase throughout the world as countries endeavor to handle the aftermath of the COVID-19 pandemic while continuing to adopt the G20/OECD's base erosion and profit shifting (BEPS) final recommendations, and multinational enterprises (MNEs) revisit their existing structures and transfer pricing policies in light of the evolving tax climate.

Globally, tax authorities are dedicating increased resources to transfer pricing examinations of cross-border transactions, which can lead to double taxation for MNEs. In this enforcement environment, managing transfer pricing risks proactively continues to be one of the focus areas for MNEs that engage in cross-border intercompany transactions.

Many MNEs manage their transfer pricing in a proactive manner through advance pricing agreements (APAs), where APAs often helped them resolve complex issues in a practical manner, giving tax transfer pricing certainty for multiple years at a time. In this current environment, MNEs likely will have increased interest, including those that have not previously considered an APA as a component of their transfer pricing risk management strategy. De­loitte Global has de­vel­oped its high qual­ity e-learn­ing mod­ules to help users de­velop their knowl­edge and ap­pli­ca­tion of the ba­sic prin­ci­ples and con­cepts of IFRS and IAS Stan­dards. Our e-learn­ing on IFRS has been a lead­ing ed­u­ca­tional and train­ing re­source on IFRS since it was ini­tially re­leased in 2004, with a range of cor­po­rate, ed­u­ca­tional and pro­fes­sional or­ga­ni­za­tions us­ing the con­tent as their pri­mary tool for IFRS ed­u­ca­tion.

For further detail read the tax@hand article bulletin on the Deloitte USA website.

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