Transfer Pricing for Small to Mid-Size Businesses: Navigating Intercompany Transactions, Pitfalls to Avoid

This CLE/CPE course will guide attorneys and tax professionals on managing transfer pricing issues for small to mid-size companies (SMEs). The panel will discuss key tax provisions under current tax law that impact transfer pricing and strategies for intercompany agreements and avoiding penalties and audits. The panel will also present case studies and recommendations for multinational entities and their advisers to preserve cash and limit tax exposure.

Transfer pricing is widely considered the most contentious tax issue for cross-border companies. However, many companies can realize significant tax and cash savings with a strategic approach to transfer pricing. In addition, transfer pricing also affects customs duties payable.

Cross-border companies typically operate through multiple corporate entities requiring intercompany transfer pricing arrangements, which the IRS, states, and foreign governments scrutinize. The IRS has the authority to review the transfer pricing methods of business entities generating foreign income and make adjustments under IRC §482, which typically results in a significant tax liability assessment.

Also, many states challenge intercompany transactions through statutes and regulations similar to IRC §482 to collect additional revenue. States that have not adopted IRC §482 or similar rules may also negate the effect of intercompany transactions through discretionary powers to adjust income, statutes requiring the addback of some intercompany payments, or the assertion of nexus principles for entities not physically present in the state.

Listen as our panel provides guidance on the laws and regulations affecting transfer pricing, methods to establish compliant intercompany arrangements, and techniques to manage transfer pricing challenges and penalties.