Transfer Pricing Studies and Consulting

Back

Transfer Pricing issues relate to the potential differences in the pricing of goods or services, and/or the royalties charged for use of intellectual property or other intangible assets, when charged at arm's length between unrelated entities as compared with the charges between commonly controlled related entities.

The IRS and several state tax authorities have made public announcements of their renewed interest in this 'sleeping giant', especially due to the increased need for tax revenue! In fact, most of these announcements have stated that enforcement efforts toward transfer pricing will continue to be a priority in their audit activity. Through planning efforts of CPAs and Tax Attorneys, the movement of income to lower-taxing jurisdictions results in tax minimization for clients, and tax revenue minimization for these jurisdictions.

Transfer Pricing studies performed by business valuation firms assist CPAs, Attorneys, and their clients to determine supportable and defendable transfer prices among and between the entities in a related group. The unbiased reports of valuation consultants provide an early level of comfort in the plan, may be used to help craft the inter-company contracts for goods, services and use of intangibles, and provide the tax-planning file with an independent defense of transfer prices used in the case of an audit.

Additionally, for Company executives and their advisors to properly analyze the Returns on Investment (ROIs) and other measure of performance of business units or segments, those segments must properly reflect the economic results of its operations, as if it operated in an arm's-length environment. Thus, at times, transfer pricing adjustments may be necessary prior to performing accurate and meaningful analyses of business segments/units. Further, if a corporate group desires to divest itself of a particular business unit, accurate valuation and sales negotiation strategies are necessarily determined only with accurate transfer pricing among and between related entities.

The mix of credentialed valuation expertise and real business and valuation experience results in the unique ability of the professionals at Strategic Valuation Group to serve business owners and their financial and tax advisors in this growing area of Transfer Pricing.