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Practice/Industry Group Overview
Gardere has assembled a global team of tax professionals with demonstrated legal and economic expertise to create one of the finest Transfer Pricing practices in the world. Team members have extensive experience developing inter-company transfer pricing strategies and resolving international tax disputes for some of the world's most recognized multinational enterprises (MNEs).
Unlike most law and accounting firms, and even boutique consulting groups, the Gardere Transfer Pricing Practice employs a unique, targeted approach to deliver cost-effective and expedient bottom-line results for clients.
Planning and Structuring
Transfer pricing involves a complex web of regulations and reporting requirements that is increasingly becoming the Gordian knot around modern businesses. Successful MNEs have little choice but to consider and incorporate intelligent and reasoned transfer pricing policies into their tax planning and structuring. Gardere literally wrote the book(s) on transfer pricing (including “U.S. International Transfer Pricing” and “International Transfer Pricing: OECD Guidelines,” both published by Warren Gorham and Lamont).
Our treatises on the application and management of transfer pricing and tax have helped many companies untangle the competing claims of tax authorities and adapt effective policies for their particular business situations. Our tax planning solutions include organizational and operational restructurings and asset re-pricings, withholding tax minimization strategies and refund claims, and optimal foreign tax credit utilization. These solutions have allowed MNEs to lower effective tax rates and satisfy other critical business objectives.
Documentation
In order to meet governmental tax requirements and avoid transfer-pricing penalties, MNEs are required annually to prepare contemporaneous transfer pricing documentation prior to tax return filing deadlines. Such documentation requirements now exist in more than 60 countries. Gardere regularly prepares and reviews transfer pricing documentation for its clients in a wide range of industries and a variety of countries. Gardere’s Transfer Pricing team has the resources and experience to deliver a range of cost-effective documentation solutions from complete multi-country global reports to annual and periodic updates.
Economic Analysis
Economics and transfer pricing go hand in hand. Proper application of the arm’s length standard requires due consideration of the economics of related party transactions. Gardere has long recognized the importance of economics and has brought its own team of economic, accounting and financial professionals in house. In addition to conducting transfer pricing studies, Gardere economics professionals provide fair valuations and pricing studies of complex structures and property, including technology and brand intangibles, royalty rate determinations and buy-in/buy-out computations.
Controversy
As with any form of tax planning, controversies are a predictable element of transfer pricing in the United States and abroad. Gardere has substantial experience in handling transfer pricing and international tax controversies across a full range of jurisdictional settings: Competent Authority, Appeals, APA, PFA (pre-filing agreement) and other advance dispute resolution forums, as well as in court.
Gardere has one of the most recognized Competent Authority practices in the world, routinely handling matters involving the U.S., Japan, the United Kingdom, Canada, Mexico and other countries. In every setting, Gardere utilizes the breadth of its experience, relationships and expertise to prepare and position issues, whether for trial or negotiated settlement, so as to achieve for our clients the ultimate objective – effective, expedient tax resolution.
FIN 48
In 2006, the Financial Accounting Standards Board (FASB) issued interpretation No. 48,Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 is the latest twist in transfer pricing compliance and international tax structuring. FIN 48 requires a two-step analysis of recognizing and measuring the financial statement consequences of a company’s tax positions. FIN 48 presents the associated challenge of defending FIN 48 conclusions to MNE’s financial auditors, as well as the potential ramifications of submitting such analysis to the IRS or other tax authorities. A new and increasing aspect of our practice involves providing opinions and similar advice on FIN 48 issues, negotiating with financial auditors on behalf of clients regarding the application of FIN 48, and obtaining tax rulings, pre-filing and other advance agreements from tax authorities to eliminate FIN 48 exposure and mitigate adverse financial impact.
The Gardere Approach
Gardere has developed a niche in the transfer pricing world that is in sharp contrast to accounting, consulting, and other law firms. The Gardere Team has practical expertise in each of these areas on a global basis.We utilize this expertise to work with our clients' internal tax, financial and operations executives to produce efficient, successful means of addressing matters within the full spectrum of transfer pricing work. In addition, the Gardere Team can provide turnkey solutions in the event internal resources are limited.
Our approach is not to employ a team of economists or associates who, while technically competent and ostensibly cost-effective, are often formulaic in their approach, lacking the necessary experience to handle all but the most basic of transactions without additional and costly layers of supervision, strategic direction and settlement authority.
We differ in approach from other tier-one international law firms, many of which do not have a dedicated transfer pricing practice. Those firms, though they may have a particular strength or expertise in one area, industry or region, typically must engage external experts to provide procedural assistance, economic analysis, tax planning or negotiating strategy. Such an approach can often be disjointed and unwieldy, not to mention costly and difficult to coordinate.
Gardere has been resolving transfer pricing cases since the 1970s.We have handled a significantly large number of cases around the world such that our work can be viewed as a clearinghouse-type of practice. We have developed a broad understanding of the methodologies that are actually used by the principal tax authorities to resolve cases. Our approach has been successfully applied and routinely accepted by tax authorities in the U.S. and in countries across the world, including Australia, Canada, Japan, Mexico and the U.K. It has similarly been effective across a wide range of high technology and intangible property-intensive industries, including telecommunications, pharmaceuticals, digital entertainment, computers and semi-conductors, as well as wholesale and retail distribution, basic manufacturing, consumer products, energy, engineering, and financial services.
Through our experience in these matters, our know-how and know-who capabilities, we have developed a more predictable and effective means of structuring and resolving transfer pricing issues. The Gardere approach is to provide practical, workable methodologies, design appropriate documentation, and achieve efficient, expedient results. Our experience translates into your success.
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