Barnes Dennig Transfer Pricing After Tax Reform and COVID-19 120920 - BD | Page 12
TP DOCUMENTATION - FIRST LINE OF DEFENSE
• First , and best , opportunity to avoid an audit
• Documentation is an opportunity to explain transfer pricing
• Not filed with the US tax return , but requested under audit
Documentation generally includes the following
• Analysis of how business operates in the US and overseas
• Industry analysis
• Financial analysis of client and transactions
• Economic analysis demonstrates why transfer pricing is arm ’ s-length ( correct )
• Often utilize ‘ comparable ’ databases