International Tax Compliance is Changing, Is Your Transfer Pricing Aligned?

Transfer pricing compliance professional reviewing international tax compliance requirements

With transfer pricing penalties now common or automatic in nearly 75% of countries globally¹, the question is no longer whether you have documentation. It’s whether your entire transfer pricing position can withstand scrutiny from the ground up. That requires regularly monitoring transfer pricing as a core part of your tax planning and compliance risk management program, not treating it as a one-and-done activity.

From mapping your global footprint to identifying your risks and opportunities, you need the right data, analysis, and expert transfer pricing advisory services to develop your position and support it.

Is Your Transfer Pricing Policy Tax-Efficient? Key Questions to Ask

As you reflect on your 2025 strategy and begin your retrospective documentation, here are a few quick questions to ask:

Do the outcomes align with your policy?

Is your transfer pricing policy tax-efficient?

Have you determined which transactions have the greatest impact on your overall transfer pricing position?

Are your financial systems aligned to commercial, financial, and tax functions in addition to managing the business?

Do you have clearly defined roles for the team responsible for managing your transfer pricing obligations?

These questions are a good starting point, but getting your internal house in order is only half the battle.

Why International Tax Compliance Scrutiny Is at Record Levels

The enforcement environment has shifted dramatically, and the scrutiny doesn’t stop with your documentation package.

The numbers tell a clear story:

~1,000 new transfer pricing cases brought to mutual agreement procedures — near record-breaking levels (OECD)
180 IRS compliance alerts issued to U.S. subsidiaries of foreign corporations between November 2023 and January 2024 alone

A clear signal that enforcement is no longer reserved for the largest or most complex multinationals.

Tax authorities are reviewing the decisions that happen upstream: how your intercompany pricing was designed, whether your cash pooling rates reflect arm’s-length terms, and whether your financing structures can withstand scrutiny from a structural perspective.

With enforcement now extending beyond documentation into the upstream decisions that shape your transfer pricing position, the case for proactive transfer pricing planning and compliance management has never been stronger.

Exactera’s Transfer Pricing Advisory Services: Planning, Optimization, and Compliance

If you have yet to master the ongoing, multi-phase lifecycle from initial value chain analysis through policy design and operational implementation, Exactera can help. Exactera now offers four new advisory services that address the planning and structuring work to determine whether your TP position is truly defensible — before documentation even begins:

1. Transfer Pricing Planning & Optimization

Establish legally defensible intercompany pricing structures through functional analysis and benchmarking.

2. Cost Allocation and Intercompany Service Transactions

Document and defend intercompany service transactions, including stewardship analysis and determination of key allocation drivers.

3. Cash Pooling Analysis and Benchmarking

Analyze short-term cash management arrangements, including benchmarking for withdrawal/deposit rates and administrative fees.

4. Intercompany Financing Support

Specialized analysis for cross-border intercompany financing arrangements, including credit rating assessments, debt capacity modeling, guarantee fee benchmarking, interest rate benchmarking, and thin capitalization reviews.

Transfer Pricing Planning in Action: A Real-World Case Study

The urgency of getting this right isn’t theoretical.

Challenge: Absorbing import tariffs of up to 39% with no mechanism to pass costs to the foreign principal
Approach: Identified the U.S. entity as a hybrid operation spanning three distinct functions
Outcome: Resolved pricing distortions across seven business segments and strengthened audit defense position

Get Ahead of International Tax Compliance Risk with Exactera

This is the kind of transfer pricing strategic work that separates a defensible transfer pricing position from one that simply checks the documentation box. If your organization is navigating similar complexity — whether from tariff exposure, hybrid entity structures, or intercompany financing arrangements — Exactera’s advisory services are designed to get ahead of the risk before it becomes a dispute.

Book a consultation with our tax experts or reach out to your Client Success Manager to learn how Exactera can support your tax strategy beyond documentation.

Sources