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Transfer Pricing – Services

Transfer pricing is the pricing of transactions between commonly controlled business entities. These controlled transactions include transactions involving (1) finished goods, components, raw materials, or other tangible property; (2) services; (3) patents, copyrights, and other intangibles; (4) leasing or rental of real or tangible property; and (5) loans or other transfers of money. There is a transfer pricing transaction every time there is a transaction between related parties.

The Internal Revenue Service (“IRS”) and many other taxing authorities expect these related party transactions to be carried out at arm’s length prices. Arm’s length prices are those prices that would occur if unrelated parties carried out the same transactions under the same facts and circumstances. Transfer pricing may be the most important corporate international tax issue today.

Johan Deprez has worked on transfer pricing projects since 2000 for a large multinational company, large accounting firms, and – most recently – for more than eight years with the IRS. As both an attorney and an economist, he has worked on over 50 Advanced Pricing Agreements (“APAs”). This includes unilateral APAs (only involving the IRS and the taxpayer) and bilateral APAs (involving the IRS, the taxpayer, and the tax authority of a second country) involving Japan, Canada, the United Kingdom, Germany, France, the Netherlands, and other countries. Industries covered included automotive manufacturers, distributors, and parts; semiconductors, computers, and consumer electronics; textile, clothing, and footwear; shipping and transportation; agricultural products; and other high-tech products.

The Law Office of Johan Deprez provides transfer pricing services directly to multinational companies or, on a consulting basis, to accounting and law firms whose clients need transfer pricing services. The transfer pricing services include Transfer Pricing Planning, Compliance Analysis, and Audit Defense.

Transfer Pricing Planning

Companies with controlled transactions should develop a transfer pricing plan in order to adhere to transfer pricing laws, meet their tax filing obligations, minimize the tax due, and avoid serious tax penalties. The Law Office of Johan Deprez provides:

  • General transfer pricing and intercompany transactions counsel;
  • Transfer pricing risk analysis;
  • Supply chain and business structuring counsel;
  • Services to arrive at Advance Pricing Agreements (“APAs”);
  • Drafting of intercompany contracts, agreements, and related documentation.

Transfer Pricing Compliance Analysis, Support, and Filing

Multinational companies are required to provide contemporaneous documentation to support the transfer pricing employed. The Law Office of Johan Deprez:

  • Prepares the appropriate documentation studies;
  • Advises and trains clients on the proper preparation of documentation studies; and
  • Advises, reviews, and trains employees of accounting and law firms on the proper preparation of documentation studies and other transfer pricing issues.

Transfer Pricing Audit Defense and Appeals

When the IRS and other tax authorities challenge the transfer pricing employed by a company, the tax adjustments, penalties, and interest can very large. The Law Office of Johan Deprez:

  • Provides analysis and support during transfer pricing audits;
  • Negotiates mutually-acceptable outcomes;
  • Handles the appeals process, if required; and
  • Manages Competent Authority Mutual Agreement Procedures (“MAP”).