Controversy strategy and scenarios
At Quantera Global, we view controversy as a broad concept. Controversy is not only the handling of disputes that have emerged, but also communication with tax authorities, effective handling of tax audits and possible risks and considerations for the transfer pricing policy applied. The increase in transfer pricing regulations and their growing complexity leads to an increase in transfer pricing controversies. Therefore, it is important to have a controversy strategy and to be prepared for different scenarios.
More and more
More and more companies are facing controversy. This is due to increasing transparency and resources used by tax authorities in the transfer pricing area. Other factors that have led to an increase in controversy are:
- Increased information available to tax authorities, as a result of country-by-country reporting and information exchange.
- Increased resources used by tax authorities.
- Changes in the OECD transfer pricing guidelines.
The importance of the strategic approach
It is not possible to completely prevent transfer pricing controversy, but a proactive stance is recommended. Tax authorities will however form their own opinion on the facts and circumstances. The primary approach to tackle controversy is to start with a proactive controversy strategy. Especially for large companies, such as multinationals, it is important to have a clear and consistent strategy. The strategy includes the approach in different jurisdictions and global management of transfer pricing audits.
The QG offer
To ensure your company’s time and budget is spent where it adds the most value, we help you define a controversy strategy that best supports your company and your risk appetite. Together, we can determine which strategy best suits your company. Prevention is better than cure. Being proactive in controversy means preparing a controversy strategy which can include APAs and risk reviews. We offer an overview of controversy strategies to consider, scenario analyses and analytical outcomes. Despite a good controversy strategy, it is possible that controversy issues rise. When this is the case, QG can help your company deal with these issues. Services offered by QG include support in local transfer pricing audits, mutual agreement procedures (MAPs), arbitration and mediation and expert witness testimony.