Assessing the costs of transfer pricing disputes

Transfer pricing taxation is typically the most important tax issue for multinational corporations, so it follows that any dispute over these taxes also can be costly if not resolved in a company’s favor. Yet not all potential costs involved in a dispute are easily identified, yet they can be critical to results.

Grant Thornton’s Steven Wrappe, in an article for Bloomberg Tax “The Total Costs of Transfer Pricing Disputes: Higher Than You Think,” reviews the many factors that can cause the price of a transfer pricing disagreement to quickly mount. While explicitly defined costs such as penalties and calculations of interest are understandable, other costs such as in-house costs and fees can be harder to quantify.

Read the Bloomberg Tax article here, and see our own story on the subject, “Why transfer pricing disputes are hard to resolve.”