Caplin & Drysdale's Peter A. Barnes
spoke with BNA's Tax Management Transfer Pricing Report
™ on how transfer pricing changes at heart of BEPS project will lead multinationals to reconsider how they structure worldwide operations in 2016. For the full article, please visit BNA's website
(subscription required). Excerpt taken from the article.
Peter Barnes, a professor at Duke University School of Law and of counsel at Caplin & Drysdale Chartered, said the best companies have made a "dry run" of their country-by-country reporting and have identified countries for which they may face questioning.
"In many cases, the tax paid in those countries is appropriate, but companies need to be ready to explain their structures and why the tax rate is what it is."
Although a burden is associated with preparing the master file, Barnes said companies will find the exercise is, in fact, quite valuable.
"A good master file"—one that describes the value chain—"forces the tax department to think deeply about the business and the value-drivers. Companies may find that their transfer pricing does not fully correlate with the value-drivers, and preparing the master file may cause companies to re-think their current pricing practices," he said.