Is there no getting away from the fact that there’s a compliance burden when it comes to Transfer Pricing?

In TP-topia, some feel as though the ever increasing need for compliance is burdening companies, taking attention away from a business’ real focus - which is to make a tonne of cash (sorry, create value for shareholders)!

From a hiring perspective, this does present good and bad news. For Tax Directors, a lot of the information requested by Tax Authorities is deemed too wide, creating compliance and administrative burdens due to unnecessary data requests. This is creating a need for more talent within the industry and, slowly but surely, businesses are expanding their taxation departments to cope with the increasing reporting requirements. Which is good, right? Well, on the flip side, the work being asked to be completed, is not at the “sexy” end of the scale.

CbCR and DAC6 are expected to cause further compliance issues as distrust grows among tax administrations and corporations. Because of this, it would appear the pressure on taxpayers is more likely to increase, especially as support for increased compliance is backed politically, with reputational risks and public scrutiny on the horizon.

CbCR seeks to increase corporate tax transparency whilst DAC6 requires taxpayers to report any and all aggressive tax events. The policies are broad, and in their attempts to cover themselves, taxpayers are overfeeding tax authorities with information, which is only creating more problems as investigations become more robust and lack of trust is mounting.

It would appear as though there is a significant issue within tax transparency today, with both the taxpayer and authorities trying to stay afloat when it comes to compliance and information overload. Through fear of being targeted, Transfer Pricing teams are being heavily invested in as taxpayers and authorities alike are facing more scrutiny as regulations on tax transparency fail to ease.

TP International is currently working with several Multinational clients to establish, grow and develop their in-house Transfer Pricing teams across the world. And fear not, despite the theme of this piece being on compliance, not all roles we are working on involve a heavy compliance burden.

For a confidential discussion on how we can support the establishment or growth of your in-house Transfer Pricing team or if you are looking for a new in-house role, please contact one of the team.