Develop and implement a European transfer pricing policy for a global construction machinery manufacturer

ObjectiveReview and adjust the European transfer pricing policy of a global manufacturer of construction machinery and equipment
FunctionProject manager
CountriesEurope (Belgium, Germany, UK, and Italy)
ProfileA leading Japanese manufacturer of construction machinery reviewed and adjusted its European transfer pricing policy according to the OECD Transfer Pricing Guidelines
FocusThe European business strategy was analyzed, functional and risk profiles of the European entities were established
The transactional net margin method coupled with either resale price or cost plus was the transfer pricing method of choice
A European outside evidence study for component manufacturing and import/distribution was conducted. Functional and risk adjustments were determined to the extent required.
ResultsThe transfer pricing related administrative burden was reduced. The tax exposure was reduced