How Transfer Pricing Can Create Value
31 January 2007
By Pim Fris and Jean-Sébastien Lénik
In this article from International Tax Review's Intellectual Property Supplement, NERA Associate Director Jean-Sébastien Lénik and Special Consultant Pim Fris discuss how transfer pricing contributes to value creation, which is achieved when positive economic return on investment is generated for capital investors. The authors explain that not only does efficient transfer pricing management avoid value leakage that would result from transfer pricing exposure, but it also significantly contributes to the value creation process of multinational enterprises (MNEs) in making sustainable tax savings achievable. The challenge for these MNEs is to ensure that their transfer pricing structures are delivering the optimal planning/risk management trade-off that maximizes value creation. Doing so requires that taxpayers develop new approaches to successfully achieving both their planning and risk management objectives.
This article was first published in International Tax Review's Intellectual Property supplement (5th edition). For more information, please visit www.internationaltaxreview.com.
