This year’s Nexia International Tax Conference revealed some interesting insights into the role technology will play in transfer pricing work in the future.
Three business men having a discussionIn a globalised economy small to medium enterprises (SMEs) with an overseas presence and large multinationals with complex supply chain, need an increasingly sophisticated approach to tracking and mapping their intercompany flows.
This approach also applies to carrying out related economic and financial analyses to manage transfer pricing arrangements. Indeed, easy access to reliable transfer pricing data will become more and more important in the future.
The ongoing evolution of process automation is likely to have a major impact on the way that transfer pricing is managed in terms of carrying out benchmarking analyses, master file and local file preparation and country by country reporting.
Specialist software, like multifunction enterprise resource planning systems, is now available specifically for transfer pricing work.
This should allow transfer pricing specialists to shift the focus of their work from compliance to more strategic, value adding activities.
The databases available for benchmarking analysis can nowadays integrate wider data feeds than in the past and more sophisticated tools can be used to make the most time-consuming processes highly automated.
Whether it’s benchmarking software or sector information databases, automated tools that can generate drafts of master files and local files, or project management systems designed to streamline and monitor transfer pricing workflows, the management of transfer pricing is changing very rapidly.
These developments are particularly significant in a post-BEPS world in which companies need to take a broader perspective on their overall supply chains in relation to transfer pricing, rather than focusing purely on the technicalities.
The ability to manage resources efficiently and bring together process automation tools with specialist value chain expertise will be key to managing transfer pricing in the future.
For more information, contact:
Gian Luca Nieddu
Hager & Partners, Italy
T: 39 027780711