Managing Transfer Pricing in the COVID-Related Economic Downturn

12 May 2020
Dr. Harlow Higinbotham, Dr. Vladimir Starkov, Nihan Mert-Beydilli

Managing Director Dr. Harlow Higinbotham, Director Dr. Vladimir Starkov, and Associate Director Nihan Mert-Beydilli have published “Managing Transfer Pricing in the COVID-Related Economic Downturn” in the latest edition of Tax Notes International. The authors consider how businesses can establish and document arm’s length allocations of their losses resulting from the coronavirus pandemic through strategic management of their internal transfer pricing system. 

The authors recommend that taxpayers should perform analyses to determine risk accountabilities and associated losses, assess which adjustments may be appropriate due to the extraordinary events, keep careful documentation, and begin discussions with transfer pricing authorities.

Taxpayers should take actions to assess and account for the COVID-19 impact on their transfer pricing arrangements while making sure they avoid taking steps that may not be seen as prudent after the crisis is over.

Dr. Harlow Higinbotham, Dr. Vladimir Starkov, Nihan Mert-Beydilli