Sword and a Shield
Navigating tax reporting requirements for foreign operations, particularly those involving related-party transactions, can be a complex undertaking. The common concern among multinational companies is that transfer pricing studies are complex and extremely expensive. At McGuire Sponsel, we debunk this myth. Our cost-effective approach to transfer pricing strategies and studies reduces client expenses, ensures proper compliance, and provides significant tax planning opportunities.
In addition to meeting required reporting mandates, a transfer pricing study can also result in the reduction of a company’s global effective tax rate. This is where transfer pricing can transcend being a mere compliance obligation and become a genuine planning tool. McGuire Sponsel’s transfer pricing team welcomes the opportunity to discuss these issues with your firm.
Learn why CPAs choose our team for transfer pricing
Call us at +1-800-322-7776 or fill out the form below. Our team will respond shortly.
Busting the Myths of Transfer Pricing
Generally, when a CPA identifies transfer pricing issues, clients shy away from completing a formal study based on preconceived notions that a study is expensive, time-consuming, only for large multinational corporations, or a lengthy deliverable with limited practical value.
McGuire Sponsel’s Global Business Services practice takes a different approach by viewing transfer pricing as a planning tool for your business, versus just a compliance obligation. Our Transfer Pricing is not done in a vacuum, which allows us to understand our client’s business from a commercial standpoint and use transfer pricing for smart treasury management.
IRS Guidelines
If your client has intercompany transactions, a transfer pricing study is necessary.
Transfer pricing compliance applies to all U.S. companies with transactions between any foreign related parties. IRS transfer pricing rules require that intercompany pricing between a U.S. company and a foreign affiliate must be based on an “arm’s length” price that would be charged in a similar transaction with an unrelated third party. U.S. transfer pricing is enforced under the authority of IRC Section 482, which allows the IRS to reallocate gross income, deductions or credits between two or more organizations and, under Section 6662, impose substantial penalties (as much as 40% of the deemed tax underpayment) for failed transfer pricing compliance.
Tariff Considerations in Transfer Pricing and U.S. Expansion
As tariff pressures continue to shape global trade, CPA firms should help clients approach U.S. expansion with more than just tax rates in mind. Intercompany transactions—when supported by a strong transfer pricing strategy—can be an effective tool to manage tariff exposure and reduce overall costs.
For clients with existing U.S. operations, revisiting entity structures and pricing models can further mitigate risks. By aligning transfer pricing policies with global business objectives, CPA advisors can guide clients through complex trade environments and strengthen their competitive position.