Business case: how to handle your transfer pricing compliance burden with a small tax team?
This week we have a case study about relatively small tax teams in comparison to their tax compliance burden and how to maintain transfer pricing compliance in a pragmatic and time efficient way.
Context
The tax team consists of 2 FTEs being (amongst others) responsible for the transfer pricing compliance burden of 40 countries and 200+ entities. The organization is very centrally organized working with a global advisory firm and their transfer pricing software solution. This solution was wholly focused on collaboration. During that time, the tax team spent most time converting the raw extracted financial information (invoice level) into aggregated intercompany transaction amounts in Excel. In addition, calculating reconciliations for testing purposes was also performed in Excel. The textual part of the transfer pricing documentation was performed in collaboration with their transfer pricing advisor in the collaboration tool. The whole exercise of reviewing all textual parts per local file and maintaining the financial part of the transfer pricing documentation was very time consuming.
Coperitas as a solution
With Coperitas they managed to reach the following two benefits:
- Time saving: Coperitas automated the whole financial aggregation and reconciliation exercise. Every local file reports the relevant information for that country automatically.
- Consistency and time saving: The textual parts of the local file are re-used as much as possible (one source, one truth). This results in only having to review the textual section once and being consistent across all transfer pricing documents.
Overall, this automated process reduced their time investment from multiple months to just a couple of weeks each year. Besides handling the transfer pricing compliance burden in one sprint saves the burden of tracking deadlines as all documents are ready at once.