Develop and implement a European transfer pricing policy for cars and associated P&A

ObjectiveDevelop and implement a European transfer pricing policy for cars and associated P&A complying with the OECD Guidelines and the US Regs.
FunctionProject manager leading an international multidisciplinary team, representing the project on board level, liaison with US parent
CountriesWestern Europe
ProfileA US OEM used a network of wholly owned subsidiaries (national sales companies and plants) to sell passenger cars and associated P&A to the European market.
FocusThe European business strategy was analyzed. Functional and risk profiles of the various entities were established (management interview, in-depth financial analysis)
Resale price and cost plus were selected as the most suitable transfer pricing methods (TNMM)
An European outside evidence study was conducted covering import/distribution, component manufacturing and assembly. Necessary functional adjustments were identified and determined.
Management presentations and discussions were conducted facilitating the implementation of the new transfer pricing system.
ResultsThe switch to an agreed system significantly reduced management and administrative resources dedicated to determining transfer prices. Valuable resources were refocused to grow the business. The tax exposure was reduced.

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