This month, the ABA Tax Section is publishing the new book The Fundamentals of U.S. Transfer Pricing, by Steven C. Wrappe. The book explains transfer pricing and its importance, including its role in the world’s largest tax disputes and the resulting financial reporting issues.
Transfer pricing is a significant tax and accounting issue for multinational entities with substantial related party transactions. It is a complex fair market value concept that affects taxable income in multiple jurisdictions, customs valuations, state taxes, and financial reporting. The transfer pricing issue is present in nearly half of U.S. import and export transactions, and it consistently produces tax disputes in the tens of millions and billions of dollars.
The Fundamentals of U.S. Transfer Pricing provides a comprehensive overview of transfer pricing. It explains the business need and policy underpinnings for transfer pricing and the unique concepts that drive transfer pricing analysis. The book uses helpful charts, diagrams, and formulas to explain the individual steps in transfer pricing analysis and how to apply that analysis to different types of transactions. Finally, it explores penalty rules, controversy procedures, and ways to avoid transfer pricing disputes.