Dispute prevention and resolution

Transfer pricing presents many tax, legal and operational challenges. To many taxpayers the magnitude of uncertainties - including the potential commitment of significant management time in the event of a transfer pricing examination - is not an acceptable business risk. Advance pricing agreements (APAs) allow taxpayers to achieve greater certainty via advance agreements on their transfer pricing methods with one or more tax authorities. Its historical knowledge and insight combined with more recent practical experience helps Deloitte assist companies to manage their transfer pricing issues - particularly the risk of double taxation - on a prospective basis.

In relation to disputes, often it is the actions and responses in the initial stages of tax authority enquiries or interviews that affect the course or outcome of a transfer pricing examination. Accordingly effective and efficient explanation of a business’ transfer pricing policies include early involvement of an experienced global team that has practical experience of all levels of the tax authority process, from proposed adjustments by local inspectors, through APAs, administrative appeals, litigation and the Mutual Agreement Procedure (MAP) process. Deloitte takes an integrated approach to resolving transfer pricing disputes in the MAP process. Our teams include transfer pricing MAP specialists from both countries in dispute teamed with professionals who specialize in local country requirements for indirect taxes, taxes imposed by local or state/provincial jurisdictions, international tax and interest calculations for late payment that invariably affect the outcome.