MULTINATIONAL COMPANIES RISK DOUBLE TAXATION OR INVESTIGATION FOLLOWING WIDESPREAD GLOBAL RESTRUCTURING IN FACE OF RECESSION

Taxand, the world’s largest independent global network of specialist tax advisors to multinational businesses, today warns that multinational companies could be at risk of double taxation or, worse still, investigation as tax authorities worldwide seek to prevent revenue loss through the implementation and enforcement of transfer pricing regulations.

Taxand has co-authored, with the IBFD, a comprehensive guide on Transfer Pricing to help multinational companies deal with the complex tax issues sparked by the recent widespread restructuring across the world.

The onset of recession brought widespread business restructuring, swiftly followed by a raft of transfer pricing issues for multinational companies scurrying to rationalise supply chains and maximise synergies. This, often cross border, deployment of functions and transfers of valuable intangibles has meant that transfer pricing has become one of the most important issues facing these companies today.

Antoine Glaize, Head of Transfer Pricing at Taxand, said:
“Companies are facing a reduction of their taxable profits in these difficult economic times. Further changes in structure, as the global economy starts to recover, means multinationals could be at risk of double taxation or, worse still, investigation as tax authorities worldwide seek to prevent revenue loss, through the strict enforcement of transfer pricing regulations.”
Taxand experts believe that in the post credit crunch world commercial transactions between different parts of a multinational group may not be subject to the same market forces shaping relations between two independent firms, bringing consequences for the division of tax revenues between governments.

The need for help is even greater since the OECD introduced further changes in September to its guidelines - “OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations” – the official text of which is incorporated within the guide along with information provided by Taxand specialists on transfer pricing in 29 countries.
Antoine Glaize added:
“Keeping up to date with transfer pricing regulatory change worldwide is a big challenge for all multinationals, made worse by the rapid onset of recession and then the subsequent impact on groups’ consolidated and affiliates’ profit. Effective and secured international transfer pricing policy is essential to guide companies through this maelstrom, especially as we witness the divergence of transfer prices from the observable market, a situation that is sure to draw attention from tax authorities looking to ensure they get their share of international profits.”  

NOTES TO EDITORS
ABOUT THE GUIDE:
Taxand has collaborated with the IBFD to produce the guide to give companies an immediate overview of global transfer pricing requirements and each chapter of the guide gives a concise description of the current transfer pricing laws, guidelines and methodologies in practice in each country. As the information has been provided and assessed by Taxand transfer pricing practitioners and IBFD professionals used to working with multinationals, the content presents a domestic as well as an international context. By standardising the structure of the chapters, quick and easy comparisons between countries can be made.

The countries covered in the guide are:

Argentina, Australia, Belgium, Brazil, Canada, Chile, China, France, Germany, India, Ireland, Italy, Japan, Korea (Rep.), Malaysia, Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, Thailand, Turkey, United Kingdom, United States, Venezuela.

ABOUT TAXAND
Taxand is a global network of leading tax advisors from independent member firms in nearly 50 countries. Our tax professionals—more than 300 tax partners and 2,000 tax advisors—grasp both the fine points of tax and the broader strategic implications, helping our clients mitigate risk, manage their tax burden and drive the performance of their business.
We're passionate about tax. We collaborate and share knowledge, capitalising on our collective expertise to provide our clients with high quality, tailored advice that helps relieve the pressures associated with making complex tax decisions.
We're also independent—ensuring that our clients adhere both to best practice and to tax law and that we remain free from time-consuming audit-based conflict checks. This, coupled with the compact structure of our member firms, enables us to deliver practical advice, responsively.
Taxand has achieved worldwide market recognition across the board. In the International Tax Review’s (ITR) World Tax 2010, over 95% of Taxand members were ranked top. Recently Taxand won Latin American Tax Firm of the year at the ITRs Americas Awards 2009. Taxand won the International Tax Review’s (ITR) best newcomer awards for delivering best-in-class cross border advice throughout Europe, across the Americas and over Asia Pacific in 2008. Moreover, 31 member firms were voted top in the ITR tax transaction survey and 30 were ranked top in the ITR tax planning survey 2009.
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For further information please contact:
Taxand
Abigail Tarren, Global Marketing Director T. +44 (0)207715 5243
E. atarren@taxand.com
Hogarth Partnership
Chris Matthews T. +44 (0)207357 9477
Barnaby Fry E. taxand@hogarthpr.co.uk
Simon Hockridge