In the current business landscape, tax authorities around the world are taking a closer look at transfer pricing and cracking down on companies that make unsupportable transfer pricing decisions to shift profits and avoid taxes. Taxpayers are expected to show that they have adequate processes and controls in place to ensure transfer pricing outcomes match expectations. Many multinational organizations struggle with establishing contemporaneous procedures for intercompany pricing, resulting in manual, reactive tax processes. Transitioning strategies into an operational model is complex and time-consuming, leading to disconnected tax processes.
Without proactive controls, global tax implications are often overlooked, risking disputes, double taxation and inaccurate filings. As tax authorities become more sophisticated, maintaining organized systems for transfer pricing information is crucial. Operational transfer pricing (OTP) resolves these issues, empowering organizations to develop modern transfer pricing policies that align with evolving tax demands.
