Learn why CPAs trust our team with transfer pricing
Tax reporting for foreign operations, including transfer pricing studies to support related-party transactions, can appear complicated and scary. 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.
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.
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Transfer Pricing Success Story
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Chinese Parent CompanyU.S.-Based Subsidiary
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IndustryMaintenance & Repair Services
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Project TypeTransfer Pricing Study
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Project ObjectiveLower Global Effective Tax Rate
Transferring Capital Overseas
A West Coast CPA firm sought McGuire Sponsel’s counsel on cross-border intercompany transactions for a client that designs and manufactures power generators. The multinational firm’s structure includes a parent headquartered in China and a U.S.-based subsidiary. The parent maintained healthy liquidity in the U.S. but ultimately wanted to justify retaining more money in China.
Strategy
After reviewing the legal agreements between the related parties as well as the group’s financials, we discovered maintenance and repair services of U.S.-sold products were still performed in China and were an integral part of the business. We performed a transfer pricing study to examine comparable organizations with similar models, which yielded an ability to retain more earnings in China. This analysis supported the Chinese parent’s ability to charge a fee to the subsidiary for these essential services.
Results
This transfer pricing study resulted in moving $4.5M from the U.S. subsidiary to the Chinese parent, lowered the global effective tax rate, and met the group’s goal of having more cash at the parent level.
Our Approach
McGuire Sponsel’s Global Business Services team was built to support CPA firms and their clients. Doing business internationally can mean many different things, but if you have clients moving people, products, services or information across a border, there is an opportunity to be more efficient. Our Global Business Services team offers bespoke solutions to our clients, taking the time to understand the operations, priorities and goals of clients and their businesses. McGuire Sponsel is your quarterback at home that streamlines the process and offers a wholistic suite of services from counsel to implementation and everything in between.
For the last 10 years, we've been using a national competitor for transfer pricing. After meeting with Sean King and his team at McGuire Sponsel, moving our transfer pricing work was an easy decision. The way McGuire Sponsel manages our partnership is above anything we've experienced, and the technical product is sound all for a value-driven fee.
Managing Partner, Top 200 CPA FirmAfter working with McGuire Sponsel, I definitely understand the myths in transfer pricing. I now have a clear understanding of when and how it is to be utilized and the firm to trust with my clients. Thank you to Jerry Hammel for the recommendation and sincere kudos to the international team at McGuire Sponsel.
Partner, Top 150 CPA FirmI've been blown away by the team and quality at McGuire Sponsel. Responsive, dynamic, and genuine. Do not hesitate to reach out and simply understand their approach -- I guarantee you will not be disappointed.
Director, Top 300 CPA/Advisory Firm