Page 52 - Strategic Tax Planning for Global Commerce & Investment

Tax Benefits for U.S. Exporters

 The potential penalties of non-compliance.

Transfer Pricing Strategies

In an effort to comply with the transfer pricing rules of the
jurisdictions where they conduct business, many businesses are taking
different approaches to developing compliance strategies.

1. Do Nothing Approach

One approach to transfer pricing is to do nothing. This is the
most expensive approach since the taxing authorities have the
legal tools to enforce compliance and, in times when
governments are in need to raise revenues through taxation,
additional taxes through adjustments and penalties are the easier
routes to raising additional revenues.

2. Comprehensive Analysis Approach

This is the most sensible and least expensive approach.
Management needs to evaluate all costs, risks and time
involvement and design an approach appropriate to the
company size, nature of the intercompany transactions,
worldwide income and, in general, reviewing the company’s
global structure and planning (discussed previously in section I).

In developing and creating a team of decision makers to address
and resolve the transfer pricing issues several categories of
professionals are required, including the following:

 Accountants
 Attorneys
 Computer programmers
 Customs specialists

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