TPMinds Americas by Informa Connect is the flagship independent forum for transfer pricing professionals in the U.S.
Discussions at TPMinds Americas highlighted a continued shift in transfer pricing from static compliance toward value‑based, operationally aligned, and audit‑ready frameworks, as tax authorities globally intensify scrutiny.
Value creation and high‑value services remain central focus areas.
Tax authorities are increasingly challenging traditional cost‑plus approaches where services are closely linked to intangibles, technology, data, or strategic decision‑making. The classification of “high‑value” services is highly fact‑specific, reinforcing the need for clear functional analysis and defensible narratives in TP documentation.
OECD Amount B: growing endorsement, uneven adoption.
Amount B continues to gain traction, with explicit support and implementation efforts by jurisdictions such as the U.S. (IRS) and Singapore, reinforcing that it is not intended as a departure from the arm’s length principle. However, adoption across regions remains inconsistent, with local deviations and optional application creating risk where Amount B is applied mechanically without alignment to DEMPE, functional profiles, and actual operating outcomes.
Audit scrutiny is intensifying — with clear regional pressure points.
- Canada: Shorter response timelines (e.g., 30‑day requests) and increased focus on business restructurings, consistency between functional profiles and outcomes, and supportable comparables.
- Mexico: Strict OECD‑aligned enforcement, with heightened scrutiny on manufacturing and Maquiladora structures, while maintaining targeted flexibility to support foreign direct investment.
- Brazil: A compliance‑driven TP regime with limited litigation, emphasizing up‑front engagement and resolution with tax authorities rather than post‑audit disputes.
- UK & Australia: More assertive enforcement, with sustained focus on DEMPE, embedded royalties, IP‑heavy and hub structures, and increased transparency driven by APA activity and public CbCR.
- India & Southeast Asia: Rapid expansion of formal TP regimes, including multi‑year (block) assessments, broader documentation requirements, and rising audit activity across both routine and non‑routine transactions.
Common audit triggers across regions: Intangibles transfers, manufacturing and cross‑border supply chains, loss‑making routine entities, and the quality and geographic relevance of comparables, often assessed through an industry‑specific lens.
Tariffs and trade policy are reshaping TP outcomes.
Tariffs have been increasingly viewed as a structural feature rather than a temporary disruption. They directly affect comparability, profit allocation, and the sustainability of routine entity models. A recurring challenge is determining which entity should bear tariff‑driven costs, particularly where legacy TP policies did not contemplate sudden shifts in trade risk. However, following the U.S. Supreme Court ruling announced on February 20, companies need to revisit transfer pricing and trade assumptions as the implications of that decision continue to evolve.
Operational transfer pricing and execution matter more than ever.
Tax authorities are increasingly testing how TP policies are executed in practice, including whether margins are monitored during the year, how deviations are corrected through true‑ups, and whether systems and controls support the stated functional profile. Operational transfer pricing, not retrospective benchmarking alone, is becoming a key line of defense.
AI is reshaping both tax authority audits and taxpayer compliance.
Tax authorities are using AI and data analytics to identify TP risk and audit targets. As taxpayers increasingly rely on AI for benchmarking and documentation, unexplained differences between AI‑driven results and tax authority risk models can trigger scrutiny. Best practice includes documenting AI prompts, assumptions, and outputs, and applying human judgment to ensure results remain defensible under the arm’s length principle.
As global TP enforcement becomes more assertive, multinationals must prioritize alignment among TP policy, financial outcomes, and operations, supported by robust documentation and proactive risk management — not reactive defense.
