Tariff Chaos Raises Audit Risks for Transfer Pricing

Transfer pricing is increasingly becoming a hot area for tax audits, raising risks for companies as they try to navigate an uncertain political and economic environment, recently exacerbated by ever-changing US tariff rates on major trading partners.

Countries are looking for revenue, especially after the pandemic and amid a brewing trade war with the US—and transfer pricing examination can be an attractive place to find it. Unlike in the US, many tax authorities are increasing their investments in audit teams.

“Fiscal pressures cause all tax authorities to be more assertive, more aggressive in audits, especially in the transfer pricing space,” ...