Transfer Pricing Tops List of BEPS Concerns (Among Other Challenges)

  • August 11, 2017

U.S. Tax executives are experiencing growing anxiety regarding international tax planning challenges as new issues start to materialize due to potential U.S. tax reform.

Transfer pricing recommendations within the OECD’s Base Erosion and Profit Sharing Plans (BEPS) are especially worrying. According to the 2017 BDO Tax Outlook Survey, “BEPS recommendations around transfer pricing (Action Items 8, 9, 10 and 13) generate the greatest concern among tax executives…” in fact 76 percent of those surveyed currently include transfer pricing mechanisms as part of their organization’s tax strategy.

On an encouraging note, tax leaders who participated in the survey indicate that their anxiety is spurring them to action: 57 percent of survey respondents report that their functions are taking proactive steps concerning the implementation of BEPS requirements. That said, more than one-third of respondents say they are waiting for individual countries to finalize their adoption of BEPS measures before taking action.

Waiting may prove risky, especially with regard to rapidly approaching BEPS compliance dates, such as country-by-country (CbC) reporting requirements, which in many countries take effect for tax years starting on or after January 1 of this year. “Now that the country-by-country reporting deadline is looming, businesses need to take steps to proactively adjust their financial reporting practices and prepare for future changes related to transfer pricing mechanisms,” notes BDO National Managing Partner of Specialized Tax Services Paul Heiselmann.

BDO’s third annual Tax Outlook Survey report – a 12-pager packed with infographics – also sheds light on how tax executives feel about U.S. tax reform, R&D tax credits, state and local tax trends, cybersecurity liabilities and more. These cybersecurity concerns are noteworthy, and they reflect issues that everyone in the organization, including tax executives, need to consider and address. As tax teams increasingly use advanced data management technology to increase efficiency while improving governance and control, the transaction data they have for Transfer Pricing Actions 8, 9, 10, and 13 (which include some highly sensitive financial and transactional details) must be kept secure, especially within publicly traded companies.

Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.


About this Contributor

Bernadette Pinamont Headshot
Bernadette Pinamont
Vice President, Tax Research

Bernadette Pinamont is Vice President of Tax Research responsible for leading a global team of 85 tax professionals who contribute subject matter and technical expertise to build and maintain content for all products, powering millions of effective tax rate determinations for customers in over 19,000 global jurisdictions.

Prior to joining Vertex, Bernadette was Vice President of Tax for Endo Pharmaceuticals. Bernadette's 30 plus year tax career also includes the corporate tax departments of AstraZeneca, DuPont, Syngenta, Tyco Toys, and, initially, EY. When Bernadette joined Vertex in 2013, she was a thought leader in the Chief Tax Office and engaged both industry and clients on the trends, patterns, and emerging solutions to address the global challenges associated with regulatory compliance and tax technology.

Bernadette regularly speaks at local and industry events about tax and the importance of technology, including the annual International Tax Review’s (ITR) Women in Tax Forum. She leads the Philadelphia Women’s Tax Network and is a graduate of Seton Hall University, from which she earned both a B.S. in Accounting, Summa Cum Laude, and her Juris Doctor. Bernadette is also a licensed attorney and a CPA.

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