Expert
Why now is the moment to revisit transfer pricing and your value chain
For many executives, transfer pricing still feels like a compliance topic. Important, but secondary to strategy. That perception is increasingly outdated. Today, transfer pricing sits directly at the intersection of value creation, operational design, operational effectiveness and efficiency and risk management, and the timing to act has rarely been more compelling.
Services
The business changed and changes faster than the structure
In recent years, organizations had to navigate:
- Supply chain disruption
- Inflation and rising financing costs
- Geopolitical and regulatory fragmentation
- Heightened transparency and scrutiny
Yet many group structures and profit allocation models are still based on a very different world. That gap matters.
Where value is created is no longer self-evident
Executives and tax authorities are asking sharper questions:
- Where are the real decision-makers?
- Where is IP developed and controlled?
- Who truly bears risk, and who merely executes?
Transfer pricing forces clarity on these points. And when the answers are unclear, tax authorities and auditors tend to fill in the blanks.
Why timing is critical
Many organizations are already redesigning supply chains, looking for increased efficiency, centralizing or regionalizing functions, investing heavily in technology, data and IP, reconsidering funding and risk allocation.
These are strategic moments. Embedding transfer pricing and value chain alignment now:
- Increases credibility
- Reduces future controversy
- Optimizes tax costs and reduces exposure
- And avoids costly retroactive fixes
Once structures are set, flexibility disappears.
This is about resilience, not optimization
Modern transfer pricing is not about chasing the lowest tax rate. It is about:
- Defendable profit allocation
- Consistency across jurisdictions
- Alignment between transfer pricing, VAT and customs
- Alignment between business reality and tax outcomes
- And structures that remain robust under scrutiny
Resilient value chains outperform clever ones.
Final thought and a simple question for leadership
Transfer pricing is no longer a back-office exercise. It is a strategic tool that helps organizations articulate and defend how they create value. If you had to explain today: Where does our group create value, and why do profits end up where they do? Would the answer be clear, consistent and convincing? If not, now is the right moment to take a closer look.
Curious how this will affect your organisation?
At aaff, we like to be meaningful, by sharing knowledge, providing insight and offering practical advice. Please contact our international specialists if you want learn more or how to prepare.
Other insights
Pillar 2: the illusion of certainty. How multinationals can prepare for a tax world that won’t stand still
For boards and executives, global tax has crossed a line. Pillar 2, ATAD 2 and public Country-by-Country Reporting are no longer “technical tax matters”.
Year-end Transfer Pricing adjustments: why VAT and Customs are suddenly in the room
For years, transfer pricing, VAT and customs lived in separate silos. Different teams. Different advisors. Different logic. That separation is breaking down fast and scrutiny increases.
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