Original equipment manufacturer (OEM) customers generally request to be invoiced by their suppliers from manufacturing sites geographically close to the OEM’s own plants. For the transfer pricing (TP) of automotive suppliers, this means the relationship between the headquarter entity (HQ) and local manufacturing entities is of paramount importance. However, in practice, different companies have developed two very different—even contradictory—approaches.

In their new article published in the International Tax Review, NERA Economic Consulting Managing Director Dr. Yves Hervé, Director Philip de Homont, and former Consultant Dr. Salem Saljanin discuss the transfer pricing challenges that multinational automotive suppliers increasingly face and present innovative solutions in a post-BEPS environment.