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Why Grant Thornton
Whether you’re growing in one market or many, looking to operate more effectively, managing risk and regulation, or realising stakeholder value, our firms can help.
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Grant Thornton’s culture is one of our most valuable assets and has steered us in the right direction for more than 100 years.
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Beyond global scale, we embrace what makes each market unique, local understanding on a global scale.
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Join our network
In a world that wants more options for high quality services, we differentiate in the market to grow sustainably in today’s rapidly changing environment.
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Leadership governance and quality
Grant Thornton International Ltd acts as the coordinating entity for member firms in the network with a focus on areas such as strategy, risk, quality monitoring and brand.
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Americas
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19 member firms with nearly 25,000 people to support you.
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Business consulting services
Our business consulting services can help you improve your operational performance and productivity, adding value throughout your growth life cycle.
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The relationship between a company and its auditor has changed. Organisations must understand and manage risk and seek an appropriate balance between risk and opportunities.
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As organisations become increasingly dependent on digital technology, the opportunities for cyber criminals continue to grow.
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Forensic services
At Grant Thornton, we have a wealth of knowledge in forensic services and can support you with issues such as dispute resolution, fraud and insurance claims.
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We work with entrepreneurial businesses in the mid-market to help them assess the true commercial potential of their planned acquisition and understand how the purchase might serve their longer-term strategic goals.
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Workable solutions to maximise your value and deliver sustainable recovery.
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Transactional advisory services
We can support you throughout the transaction process – helping achieve the best possible outcome at the point of the transaction and in the longer term.
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Valuations
We provide a wide range of services to recovery and reorganisation professionals, companies and their stakeholders.
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At Grant Thornton, our IFRS advisers can help you navigate the complexity of financial reporting from IFRS 1 to IFRS 17 and IAS 1 to IAS 41.
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Audit quality monitoring
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Our trusted teams can prepare corporate tax files and ruling requests, support you with deferrals, accounting procedures and legitimate tax benefits.
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Direct international tax
Our teams have in-depth knowledge of the relationship between domestic and international tax laws.
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Global mobility services
Through our global organisation of member firms, we support both companies and individuals, providing insightful solutions to minimise the tax burden for both parties.
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Indirect international tax
Using our finely tuned local knowledge, teams from our global organisation of member firms help you understand and comply with often complex and time-consuming regulations.
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Transfer pricing
The laws surrounding transfer pricing are becoming ever more complex, as tax affairs of multinational companies are facing scrutiny from media, regulators and the public
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Africa tax desk
A differentiating solution adapted to the context of your investments in Africa.
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Banking Holding banking to account: the real diversity and inclusion pictureWe explore how the banking sector can continue to attract, retain and nurture women to build a more diverse and inclusive future.
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Sustainability From voluntary to mandatory ESG: How banks can future-proof their operationsAs we move from voluntary ESG initiatives to mandatory legislation, we explore what the banking sector needs to prioritise.
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IFRS IFRS 9 - Audit of Expected Credit LossesGPPC releases The Auditor’s response to the risks of material misstatement posed by estimates of expected credit losses under IFRS 9
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growthiQ Steering your company to long-term successHistory has something important to tell us about the difficulties of steering a business to long-term success – through seismic shifts in technology, consumer demands and product development. With that in mind it’s unsurprising that over half the world’s largest companies in the early 1900s had shut their doors by the late 1990s. Some, however, have endured.
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International Financial Reporting Standards Implementation of IFRS 17 ‘Insurance Contracts’The auditor’s response to the risks of material misstatement arising from estimates made in applying IFRS 17 ‘Insurance Contracts’
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IFRS Get ready for IFRS 17After twenty years of development the IASB has published IFRS 17 ‘Insurance Contracts’, find out more.
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Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Global business pulse - Sector analysis Clear patterns of damage from COVID-19 across the industriesThe index results for 12 key sectors of the mid-market reveal just how much or little the various parts of the economy were impacted by COVID-19.
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Not for profit Mission: possible – putting impact at the heart of charityGlobal charitable continues to decline and charity leaders are increasingly looking at their own unique impact journey.
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Access to finance Raise finance to invest in changePrepare your business to raise finance to invest in change.
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Private equity firms Private equity in the mid-market: reshaping strategies for 2021When the global COVID-19 pandemic stormed across the globe in early 2020, the private equity sector was hit hard but deals are coming back to the market.
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Mid-market businesses Getting ready for private equity investmentOur specialists explore how private equity firms are now working with their portfolios and how the mid-market can benefit from investment.
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Mid-market businesses Myth-busting private equityNervous about partnering with Private Equity? We explore some of the common myths we come across when speaking to mid-market businesses about PE investment.
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Public sector Helping build the government of tomorrow, todayLearn about the Grant Thornton US public sector team.
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Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Global business pulse - Sector analysis Clear patterns of damage from COVID-19 across the industriesThe index results for 12 key sectors of the mid-market reveal just how much or little the various parts of the economy were impacted by COVID-19.
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Industries European Real Estate PodcastJessica Patel, Tax Partner at Grant Thornton UK speaks with tax partners and directors across the network to share their insights on the real estate market and some of the challenges.
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Industries European Real Estate PodcastJessica Patel, Tax Partner at Grant Thornton UK speaks with tax partners and directors across the network to share their insights on the real estate market and some of the challenges.
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Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Retail How retail is positioning for successCOVID-19 provided some hard lessons for the retail industry. It is time to turn those into sustainable and well executed growth strategies in 2021.
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Telecoms Can tech and telecom leverage economic headwindsAs most businesses brace for an economic downturn, tech and telecom could see new prospects. But, to turn the headwinds to your advantage, you need to find your unique opportunities and risks.
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Technology Mid-market tech companies lead the way on diversity and inclusionWe explore how the mid-market tech sector can continue to build and nurture a culture that’s increasingly more diverse and inclusive for women.
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Tax Resetting global tax rules after the pandemicBusinesses are seeing rising challenges, and finance heads are dealing with a range of new measures. To say the next 12 months are critical for businesses is an understatement.
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TECHNOLOGY International tax reform: the potential impact on the technology industryIn this article, we’ve summarised key elements of the global tax reform proposals, their potential impact on technology industry and advice from our digital tax specialists on what technology companies can do to prepare.
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Telecoms Can tech and telecom leverage economic headwindsAs most businesses brace for an economic downturn, tech and telecom could see new prospects. But, to turn the headwinds to your advantage, you need to find your unique opportunities and risks.
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TMT TMT industry: Fully charged or on standby?Our research revealed five key trends that resonated with Technology, Media and Telecoms (TMT) industry leaders around the world. We asked a panel of our experts from UK, US, India Ireland and Germany, to give us their reaction to the findings.
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Cybersecurity One size fits nothingTechnology companies must adopt a new approach to digital risk: those that successfully develop a reputation for digital trust by demonstrating an unwavering commitment to cyber security and data privacy will be able to carve out a competitive advantage.
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Technology, media & telecommunications Why it’s time for a 5G reality checkFigures suggest the mobile sector is maturing. While data usage continues to soar, mobile revenues are expected to flatten out over the next few years.
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International business Mid-market businesses lifted by rising tide of optimismOptimism among global mid-market business leaders rose to 67% in the first half of this year and they are markedly more optimistic about their prospects with global optimism having increased by 8%.
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Global business pulse - industry analysis Mid-market recovery spreads to more industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
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Hotels COVID-19: Checking in with the hotel industry one year onCOVID-19 provided some hard lessons for the hotel sector. It is time to turn those into sustainable and well executed growth strategies.
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Global business pulse - industry analysis A very uneven recovery across industriesThe index results for 13 key industries of the mid-market reveals a very uneven recovery from COVID-19
- By topic
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Women in Business 2024
2024 marks the 20th year of monitoring and measuring the proportion of women occupying senior management roles around the world.
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COP28: Mid-market firms should seize the opportunity from adaption and innovation
COP28 was the first time there has been a global stocktake on progress against the Paris Agreement.
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Scanning the horizon: Mid-market sets sights on global trade growth
The latest International Business Report (IBR) data shows that mid-market businesses have high expectations for global trade.
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Mid-market businesses less optimistic, despite record numbers expecting increased profitability
A closer examination of the data offers some explanation of this apparent contradiction.
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Women in tech: A pathway to gender balance in top tech roles
Grant Thornton’s 2024 Women in Business data suggests we are far from achieving parity within the mid-market technology sector.
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Women in leadership: a pathway to better performance
What makes the benefits of gender parity compelling is the impact it can have on commercial performance.
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Women in Business 2024
2024 marks the 20th year of monitoring and measuring the proportion of women occupying senior management roles around the world.
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Women in business: Regional picture
We saw an increase in the percentage of senior management roles held by women, on a global level, but there are some significant regional and country variations.
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Pathways to Parity: Leading the way
To push towards parity of senior management roles held by women, who leads within an organisation is vital.
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Generating real change with a long-term focus
The most successful strategy to achieve parity of women in senior management is one which stands alone, independent of an ESG strategy.
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People at the heart of great business
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Focusing and developing a solid strategy around diversity, equity and inclusion
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Ten considerations for preparing TCFD climate-related financial disclosures
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COP28: Mid-market firms should seize the opportunity from adaption and innovation
COP28 was the first time there has been a global stocktake on progress against the Paris Agreement.
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Transition Plan Taskforce publishes its final disclosure framework
As organisations in the private sector make commitments and plans to reach net zero, there's a growing need for stakeholders to be able to assess the credibility of their transition plans.
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Promoting ESG excellence through tax
ESG considerations have never been more important for an organisation’s long-term success, but how can tax be used to add value to an ESG agenda?
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International business: Mid-market growth and expansion
The mid-market looks to international business opportunities for growth.
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Top five constraints to international business in the mid-market
Top five major constraints that are testing the mid-market’s ability to grow their businesses internationally.
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Brand and international marketing – breaking global barriers
Brand has been identified as a key driver of mid-market success when looking to grow and develop international business.
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The key to international business: Investing in people
How can recruitment and retention help grow international business?
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Building resilience in international business
Evolving supply chains and trade patterns amid ongoing global uncertainty.
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IFRS Alerts
IFRS Alerts covering the latest changes published by the International Accounting Standards Board (IASB).
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Example Financial Statements
General guidance for preparers of financial statements that supports the commitment to high quality, consistent application of IFRS.
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Insights into IFRS 2
Insights into IFRS 2 summarises the key areas of the Standard, highlighting aspects that are more difficult to interpret and revisiting the most relevant features that could impact your business.
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IFRS 3
Mergers and acquisitions are becoming more common as entities aim to achieve their growth objectives. IFRS 3 ‘Business Combinations’ contains the requirements for these transactions.
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IFRS 8
Our ‘Insights into IFRS 8’ series considers some key implementation issues and includes interpretational guidance in certain problematic areas.
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IFRS 16
Are you ready for IFRS 16? This series of insights will help you prepare.
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IAS 36
Insights into IAS 36 provides assistance for preparers of financial statements and help where confusion has been seen in practice.
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IFRS 17
Explaining the key features of the Standard and providing insights into its application and impact.
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Pillar 2
Key updates and support for the global implementation of Pillar 2.
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Global expatriate tax guide
Growing businesses that send their greatest assets – their people – overseas to work can face certain tax burdens, our global guide highlights the common tax rates and issues.
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International indirect tax guide
Navigating the global VAT, GST and sales tax landscape.
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Global transfer pricing guide
Helping you easily find everything you need to know about the rules and regulations regarding transfer pricing and Country by Country reporting for every country you do business with.
Please click on each section to expand further:
- The US transfer pricing (TP) statute is expressed in the Internal Revenue Code at Section (IRC) 482.
- The US TP rules apply to all taxpayers, including US branches of overseas companies.
- The US TP rules generally authorize the Internal Revenue Service ('IRS') to allocate income, deductions, credits, and allowances among related business entities; limited opportunities exist for taxpayer application of IRC 482 to report an arm’s length result after the filing if its tax return.
- The regulations under IRC section 482 are based on the arm’s length principle and are consistent with the OECD Guidelines.
- The regulations are principles-based rather than formulaic in approach.
- The preparation of transfer pricing documentation is not mandatory, but preparation of documentation may be advisable to protect against penalties. If the IRS requests transfer pricing documentation, the taxpayer has 30 days to respond.
- The US has not adopted the OECD’s Master File and Local File concept. However, for larger taxpayer groups (over €750m) the US has implemented Country by Country Reporting (CbCR).
- IRC 482 does not explicitly incorporate the OECD Guidelines, but IRC 482 is consistent with the OECD Guidelines.
- There is no hierarchy of methods, but the method used must be applied in a manner consistent with the functional and risk profile of the tested entity.
- For transfers of tangible property, the most appropriate pricing method should be selected to provide the most reliable measure of an arm’s length result in each case. The comparable uncontrolled price, resale price, cost plus, comparable profits method, and profit split methods are all acceptable. Other methods can also be used for tangible property transactions if justifiable and appropriate.
- For transfers of intangible property, the comparable uncontrolled transactions, comparable profits method, and profit split methods are acceptable. Other methods can also be used if justifiable and appropriate.
- For controlled services transactions, the comparable uncontrolled services price, gross services margin method, services cost plus method, comparable profits method, services cost method, and profit split methods are all acceptable. Other methods can also be used if justifiable and appropriate.
- For cost sharing platform contribution transactions, the comparable uncontrolled transaction method, income method, residual profit split method, acquisition price method, and market capitalization method are all acceptable. Other methods can be used if justifiable and appropriate.
- Transfer pricing documentation is not specifically required under US TP rules. However, documentation created by the time the taxpayer files its tax return that shows that a taxpayer reasonably used a specified or unspecified method to determine its transfer price can obviate the imposition of the transfer pricing penalty.
- Documentation is an annual concept, and each tax year stands on its own. Taxpayers must maintain two categories of documentation -- principal documents and background documents. The principal documents include:
- an overview of the taxpayer’s business, including an analysis of the economic and legal factors affecting pricing;
- a description of the taxpayer’s organizational structure covering all related parties engaged in transactions potentially relevant under IRC 482;
- any documentation specifically required by the 482 regulations (e.g., documents related to a qualified cost sharing arrangement);
- a description of the method selected and an explanation of why that method was selected;
- a description of the alternative methods that were considered and an explanation of why they were not selected;
- a description of controlled transactions and any internal data used to analyze those transactions;
- a description of the comparables that were used, how comparability was evaluated, and what adjustments (if any) were made;
- an explanation of the economic analysis and projections relied upon in developing the method;
- a description or summary of any relevant data obtained after the end of the tax year and before filing a tax return; and
- a general index of the principal and background documents and a description of the record keeping system used for cataloguing and accessing those documents.
- All principal documents must be furnished to the IRS within 30 days of a request.
- Background documents support the assumptions, conclusions, and positions contained in the principal documents and demonstrate how the taxpayer’s method was selected and applied to provide the most reliable measure of an arm’s length result. They include original entry books and records, profit and loss statements, and other documents not specifically listed. Background documents need not be provided to the IRS unless they are specifically requested.
- The US has also introduced CbCR (Country by Country Reporting) regulations for groups with revenues over €750m
- The US does not require the taxpayers to prepare Master and Local files.
- IRC 6662(e) and (h) sets forth penalties of 20% and 40% for certain increases in US corporate income tax attributable to IRC 482 adjustments.
Transactional | Net adjustment | |
Substantial valuation (20% penalty) |
Price or value is 200% or more (or 50% or less) than the correct amount | Net adjustment exceeds the lesser of $5 million or 10% of gross receipts |
Gross valuation (40% penalty) |
Price or value is 400% or more (or 25% or less) than the correct amount | Net adjustment exceeds the lesser of $20 million or 20% of gross receipts |
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Adjustments are excluded from the net IRC 482 adjustment calculation if the taxpayer applies a specified or unspecified method under the best method rule and satisfies the documentation requirement.
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In addition to showing that a specified or unspecified method was reasonably applied to determine the transfer price, a taxpayer can avoid the imposition of the transfer pricing penalty only if documentation is created by the time the taxpayer files its return for each specific year.
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All principal documents must be furnished to the IRS within 30 days of a request.
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IRC 6038A imposes an obligation on US corporations that are at least 25 percent foreign-owned to file an annual information return to report transactions with related parties. A $25,000 penalty applies to each failure to file.
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Non-compliance with CbCR and notification requirements may attract penalties of $25,000 or more as a failure to provide information with regard to a foreign business entity.
- Whether the taxpayer’s use of a particular method was reasonable is determined from all facts and circumstances. Factors relevant to this determination include:
- the experience and knowledge of the taxpayer;
- the extent to which the taxpayer obtained accurate data and analyzed it in a reasonable manner;
- the extent to which the taxpayer used the most current reliable data available before the end of the tax year in question;
- the extent to which the taxpayer followed relevant requirements in the section 482 regulations with respect to application of the methods;
- the extent to which the taxpayer reasonably relied on a study or other analysis prepared by a qualified professional;
- if the taxpayer used more than one uncontrolled comparable, whether the taxpayer arbitrarily selected a result that corresponds to an extreme point in the range;
- the extent to which the taxpayer relied on a transfer pricing methodology developed and applied under an advance pricing agreement for a prior year, provided that the facts and circumstances have not materially changed; and
- the size of the net transfer pricing adjustment in relation to the size of the controlled transaction out of which the adjustment arose.
- An advance pricing agreement (APA) is an agreement negotiated between the taxpayer and one or more tax authorities about the taxpayer’s facts, methodology, and arm’s length range over a specified prospective period. US APAs generally cover a term of five prospective years, but ‘rollback’ can be used to address the same issue in previous tax years and additional prospective years can be added, as appropriate.
- The US has negotiated over 2,200 APAs since 1991. On average, the IRS has closed over 100 APA cases annually for the last five years. The average time to complete an APA in 2021 was 39 months.
- IRS strongly prefers bilateral APAs over unilateral APAs.
- The user fee for APAs is $113,500 for a regular APA request, $62,000 for a renewal APA, or $54,000 for a small case APA.
- The US has an extensive treaty network, and the Mutual Agreement Procedure (MAP) is generally available when double tax occurs. There is no user fee for MAP.
- The US allows for arbitration in the event that agreement cannot be achieved. The US has included a binding arbitration clause in its treaties with Germany, Belgium, Canada, France, Japan, Spain and Switzerland. The US has not ratified the OECD Multilateral Instrument (MLI) that includes support for arbitration.
- After making a transfer pricing allocation, the IRS will take into account appropriate collateral adjustments, including correlative allocations and conforming adjustments. Correlative allocations are made only after there has been a final determination with respect to a transfer pricing allocation. Conforming adjustments may involve the treatment of an allocated amount as a dividend or a capital contribution, or, in appropriate cases, repayment of the allocated amount without further income tax consequences.
- The US has no exemptions other than a de minimis exception for underpayments of less than $10,000.
- The economic fallout of COVID-19 has had widespread impact; a global increase in TP issues is expected. All MNCs should evaluate their transactions for potential transfer pricing exposure.
- Where supply chains have been disrupted or re-structured, expected profits may not be realized. Comparable companies may have also been affected.
- IRS has not released formal guidance on the potential treatment of intercompany transactions affected by COVID-19
For further information on transfer pricing in the United States please contact:
Steven Wrappe |