Transfer pricing has been impacted significantly by the pandemic and will be a priority issue for most multinational enterprise clients over the next two years, according to senior leaders at Kreston Global.
A recent poll of 55 international tax specialists from the network found that transfer pricing will be a priority issue for their multinational enterprise clients over the next two years, with 22% of respondents saying that transfer pricing will be their top priority, and 70% saying that it will be a priority amongst others. Only 8% of participants stated that transfer pricing would not be a priority at all and there were zero participants polled who either did not know whether it would be a priority or who did not consider it to be an issue in the first place.
In addition, the poll found that 76% of participants believed Covid-19 had impacted transfer pricing matters for their multinational enterprise clients, of which 11% stated that the pandemic had significantly impacted transfer pricing matters. Only 3% of respondents believed there to have been no impact at all.
To contrast, participants generally believed Brexit to have had substantially less of an effect, with only 5% agreeing that it had significantly impacted transfer pricing matters for their multinational enterprise clients, and 32% believing it to have had a somewhat significant impact. This is compared with 39% of participants stating that it had not very much affected their client’s transfer pricing matters, and 11% stating that there was no impact at all.
David Whitmer, US transfer pricing lead at Kreston Global, said, “In recent years we have seen transfer pricing matters shift to the fore of many of our multinational enterprise clients’ concerns, and these results reflect that increased prioritisation of these issues across our network. The pandemic, and to a lesser extent Brexit, have further impacted the way that our multinational clients are addressing their transfer pricing issues. All eyes will now be on the world’s progress towards a post-pandemic era, and how that progress impacts the trajectory of domestic and international tax policies.”