Tim Sarson discusses the challenges of operating models and transfer pricing (TP) for multinational businesses in the new reality.
“TP is set up for the good times, it’s set up for the sharing of profit across a multinational in a fair and equitable way. What happens when there is no profit in the system?”
In our new reality video, Tim Sarson, Partner Global Transfer Pricing Services, considers the short and long-term challenges affecting transfer pricing, as the world begins to emerge into a new way of working.
Businesses need to review the basic economics. Ordinarily, the biggest questions are; where should the profit sit? How is it apportioned? What happens if there is no profit? This isn’t our first economic crisis, so we need to look back and understand what lessons we can learn moving forwards
With online sales dominating the landscape, supply chains are getting shorter with a greater focus on security and flexibility, which will likely mean a restructure of the pre-COVID operating model. By far the biggest change has been the need for a ‘virtual organisation’, one which will likely remain in one form or another – this too needs to form part of a business’s restructure.
© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.