Barnes Dennig Transfer Pricing After Tax Reform and COVID-19 120920 - BD | Page 27
TRANSFER PRICING BEST PRACTICES
Review annual profit margins of each subsidiary
• Subsidiary losses / tax NOLs = Subsidiary tax risk
• Large profits in subsidiaries = Parent tax risk
• All open tax years
• Not the final answer , but a great starting point
• Utilizing tax NOLs can be a high return on investment
IRS success in Coke can be a template for other audits
• IRS more likely to raise transfer pricing as an issue