Home Resources Transfer Pricing Case Study: Siemon
Dark Mode
Transfer Pricing

Case Study: Siemon

website img – 11-7-23_siemon
Download White Paper

Exactera Gives Siemon’s Financial Controllers a Transfer Pricing Education, Allowing Them to Take Control of Compliance

It’s hard enough for companies with small tax departments to meet compliance obligations, but Watertown, Connecticut-based Siemon, has an even greater challenge: The company doesn’t have a tax department at all.

Instead, in-house financial executives Arleen Snyder, the global financial controller, and George Puglisi, the operations controller, oversee all tax compliance activities for the multinational IT infrastructure provider—including transfer pricing, which for years had been outsourced to various local accounting firms.

While traditional outsourcing freed up Snyder and Puglisi to focus on other pressing financial responsibilities—preparing financial statements, budgets, and strategizing new business—it also left them at a disadvantage. Because they are experts in finance—and not tax—they couldn’t oversee transfer pricing compliance with any real authority. Instead, they were forced to rely on foreign consultants to lead the effort and review what they could.

“In some cases, we didn’t review the reports at all because they weren’t in English,” says Snyder.

Given that transfer pricing was growing in importance globally, Siemon’s executives wanted their controllers to have more visibility into the process. However, to exert leadership, Snyder and Puglisi would need a transfer pricing education—one that would allow them to lead the compliance effort without being saddled with reports. They found it through Exactera’s educational transfer pricing webinar series.

Transfer Pricing 101

Led by Chief Economist Mimi Song, Exactera’s transfer pricing educational webinars walked Snyder and Puglisi through everything from basic transfer pricing concepts to methodology to the importance of the functional analysis and the challenges of today’s compliance.

“Mimi Song was excellent,” says Puglisi. “We didn’t have internal expertise about transfer pricing at Siemon. We needed to get some background on this.”

Impressed by Exactera’s level of expertise, Snyder and Puglisi agreed it was time for a change.

“We attended these sessions and learned so much from them that we took the business we were doing with our external tax people and switched it to Exactera,” says Puglisi. “We were able to educate ourselves and enter into an agreement that saved us money.”


On-the-Job Training

Siemon’s transfer pricing consisted of mostly product and service transactions straddling Colombia, India, China, Brazil, and the UK— aggressive jurisdictions which have their own unique legislation. It was a lot to manage.

“Each country is different,” says Snyder. “That was the challenge—understanding each individual country’s rules. Exactera helped us understand each jurisdiction’s unique requirements.”

Previously, while working with localized firms, Snyder and Puglisi stayed out of the compliance process altogether. Sometimes, as with China, due to language barriers, they had only a loose understanding of the report, which put them at a disadvantage.

“The China office produced our transfer pricing reports—we never even saw an English version of it,” says Puglisi.

Exactera’s process required more of Snyder and Puglisi, but it promised to continue their education through hands-on experience. Siemon’s professional services representative mapped out the compliance process from the start. “She documented all the countries where we had transactions, along with their compliance deadlines and she assigned target dates for us to send information,” says Puglisi. “Before Exactera, Arleen and I didn’t get involved with any of that stuff and now we were the middlemen.”

“It was more work for me,” says Snyder. “We had to collect all the information, make sure it was correct, and work with external accountants, so they understood how calculations were done in the past to ensure the documentation was consistent. The reward was we became educated in the transfer pricing process.”

In the end, they found Exactera’s reports just as substantiative as the local providers’, but centralizing the process made it easier to manage. Plus, Exactera’s transfer pricing experts were extremely helpful. “Exactera’s team was awesome to work with,” says Snyder. “They were friendly, professional, and they met deadlines. They worked with our external accountants to ensure the report was accurate and adhered to regulations. They were wonderful and provided good and accurate reports.”

Aside from complying, Snyder and Puglisi gained an education in how transfer pricing works from the inside. They gathered information from various corners of the company and interacted with their local finance people. By the end, they knew enough to question the validity of comparables.

“We got involved in the process. But that was a good thing because it helped educate us,” says Puglisi. “Before, it was like we basically knew what transfer pricing was, but now having gone through it, we understand the different methods of calculation and how comparable companies are vetted. We’re knowledgeable now. Thanks to Exactera, it’s not this fuzzy thing anymore. Anytime you can educate yourself, you’re better off for it.”