Multinational companies (MNCs) often make periodic (including year-end) transfer-price adjustments to address target profit margins and other considerations pursuant to intercompany agreements and to comply with global income tax requirements. But whether claimed transfer-pricing adjustments involving tangible goods can be supported under the World Trade Organization Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (the “WTO Agreement,” based on the 1979 GATT Valuation Agreement) is an important consideration for the C-suite, particularly given the increasing jolt of customs duties on companies’ financial statements (e.g., cash and profits).
Source: BDO
