Software Design Company Transfer Pricing Study

Approach & Results

Client Profile
McGuire Sponsel partnered with a multinational software design company with operations in North and Latin America. The U.S. subsidiary employs 194 full-time staff servicing North America, while subsidiaries in Uruguay and Colombia, with 36 and 10 full-time employees, respectively, focus on the Latin American market.

Process
The client’s CPA approached McGuire Sponsel to renew their transfer pricing study, ensuring compliance with OECD and IRS requirements. Our Global Business team collaborated with the client’s finance department, executive leadership, and CPA firm to assess the company’s global operations and financial objectives.

We conducted an in-depth review of the client’s business model, software development lifecycle, and financial performance across markets. A significant challenge arose in understanding and building upon a previous study’s profit split analysis, requiring additional research to maintain consistency while filling information gaps.

Our approach combined quantitative financial analysis with qualitative industry insights, identifying the most appropriate transfer pricing methodology for benchmarking. The entire process was completed within six weeks, demonstrating our efficiency in handling complex international tax matters.

Project Results
Our Global Business team successfully benchmarked three transactions involving intangible assets, a particularly challenging task given the complexities of valuation in this area. The study provided the client with a solid foundation for their transfer pricing strategy, ensuring compliance with international regulations while optimizing their global tax position.