Barnes Dennig Transfer Pricing After Tax Reform and COVID-19 120920 - BD | Page 24
TP CHANGES TO UTILIZE COVID-19 TAX LOSSES
Some longstanding transfer pricing polices may lead to suboptimal tax results under COVID-19
• Guaranteed cost-plus X % margin leads to large profits in one location while incurring losses elsewhere
• Tax Savings = $ 2 million x 30 % tax rate = $ 600,000 in tax