Virus Upends Tax Planning for Companies Facing Sudden Losses

As the novel coronavirus shutters restaurants, grounds planes, and closes offices worldwide, businesses face unprecedented losses that will require them to rework their intercompany tax planning.

For the vast majority of multinational companies, the economic disruptions from Covid-19 will turn the booking of profits and losses among related parties upside down—forcing many to redo their documentation and raising the risk that tax authorities will challenge the new allocations.

“It’s not going to discriminate, just like the virus, against who it impacts,” said Margaret Critzer, a senior adviser at Alvarez & Marsal Taxand LLC in San Francisco. “I think it’s going ...