Case Study: Using Transfer Pricing to Simplify Complex Intercompany Charges

August 26, 2022

About the Client:

Aprio engaged an international security solutions provider that specializes in designing, installing, managing and harmonizing physical security systems across the globe. With a team of more than 270 trained and experienced industry professionals, the company has successfully executed thousands of security projects for some of the world’s most demanding and growth-oriented organizations.

The Challenge:

The client’s international business had grown significantly in recent years and expanded to operate in several countries around the world, including the United Kingdom, China, Singapore and India. As a result, the client’s methodology of allocating intercompany revenue and costs had become outdated, complex and burdensome for its accounting team. Not to mention, the client’s outdated methodology created transfer pricing risks in the event of an audit by the IRS.

The Solution:

Aprio worked with the client to understand its current intercompany policies and assess current intercompany transactions. The team also helped the client develop new and practical intercompany policies, execute updated intercompany agreements, and implement an updated allocation methodology that would satisfy the company’s needs and comply with global tax regulations.

The Result: 

The solutions Aprio introduced simplified the client’s accounting process, optimized the company’s cash flow, and mitigated tax and transfer pricing risks. Plus, the client’s accounting team reaped greater time savings during the accounting close process, which created a happier, stress-free work environment.

This success story illustrates the importance of maintaining, updating and evaluating transfer pricing policies and documentation on a regular basis. When managed appropriately, transfer pricing can be an essential tool multinational businesses can use to manage cash flow and liabilities. A documented transfer pricing policy can also provide companies with valuable substantiation in case of an audit.

Aprio’s International Tax Team can help companies minimize risk and tax dollars paid by providing transfer pricing benchmarking, studies and policy development, helping ensure that intercompany transactions are structured correctly. Our team can also provide clients with US tax compliance support when doing business across borders.

If you are interested in partnering with Aprio to navigate transfer pricing or US tax compliance, contact us today.

Carl Budenski
International Services,
Senior Manager, Transfer Pricing
[email protected]
Ina Zharnitskaya
International Services
Tax Manager
[email protected]

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About the Author

Carl Budenski

Carl is a Transfer Pricing Senior Manager with Aprio’s International Tax team. He advises multinational and domestic businesses on intercompany transactions of tangible goods, intangible property, services, and loans. Passionate about helping businesses grow, Carl has helped many clients, including a recent client save $1 million in US tax annually through the use of transfer pricing.