Looking to future proof your career in business advisory? Find out more about Transfer Pricing as a career path…
Given current uncertainty and the pace of change in the profession, accountants and tax advisers are increasingly looking to future proof their careers by considering which industries or specialisms may be in high-demand in the coming years.
One such specialism is Transfer Pricing, an area in which Rutherford Cross has recently observed a sharp-upturn in demand. But what is Transfer Pricing, why does it matter, and where might a career in Transfer Pricing take you? Rutherford Cross North West’s Matt Nash examines further.
What is Transfer Pricing?
Transfer pricing is an important aspect of any multinational company’s operations, and we can expect it to become even more important moving forward as globalisation continues.
EY defines Transfer Pricing as “the price set between companies in the same group when exchanging goods and services or sharing resources.” Essentially, should a department of a company trade with an international department within the same company or group the company may apply tax statutes of one of the jurisdictions they are operating. The basic rationale for this operation is to reduce tax liabilities and, by doing so, maximise profits.
Why does it matter?
The Organisation for Economic Co-operation & Development (OECD) is an inter-governmental economic organisation founded to stimulate economic progress and world trade. The OECD sets out guidelines in relation to Transfer Pricing and country-by-country reporting which would prevent any exploitation of rules by large corporates operating across multiple jurisdictions with differing tax rates.
The nature and implications of the OECD guidelines are complex and can affect the operational effectiveness of an organisation. As such accountancy and advisory firms have developed teams of experts who provide consultancy services relating to Transfer Pricing strategy and help large international businesses to manage Transfer Pricing projects in line with the OECD guidelines.
Poorly executed strategies can result in double taxation and reputational harm to businesses so good advice is paramount and reduces tax risk. Furthermore, increased public scrutiny of large businesses and their tax operations means greater importance has been placed on the proper application of practices. That scrutiny has also been adopted by regulators. For example, HMRC’s 2017/18 yield from Transfer Pricing was over twice that of 2014/15, and three times that of 2012/13.
So as globalisation continues in the corporate world, the need for effective Transfer Pricing policy and strategy will become ever more important for the OECD, companies, and tax authorities to ensure confidence in appropriate governance.
Careers in Transfer Pricing?
If you are considering how to future proof your career then moving into Transfer Pricing could be a very wise move. Transfer Pricing may be particularly suitable for people who want to go beyond the traditional number-crunching or auditing of numbers in the accountancy profession to a more advisory-focused role.
We have observed candidates move into Transfer Pricing from audit, assurance, corporate tax, and transaction services – and flourish. An academic background in Law, Economics or Business Administration (BBA or MBA level) may prove a good grounding for those considering a change of discipline.
Importantly career progression opportunities are very good in the Transfer Pricing specialism as demand for services is high and currently there is a small pool of experienced peers. In our experience, professionals who succeed in this field are those:
- With an interest in finance, economics and business strategy
- Who enjoy a challenge: The issues in play are highly-complex, requiring close teamwork and problem-solving skills. A Transfer Pricing professional’s day-to-day work is varied and interesting.
- Looking to work closely with large clients: For the reasons discussed previously transfer pricing plays a key role in your clients’ operations – if you are interested in the policy and operations of global firms you will enjoy this work.
We are experiencing high demand for Transfer Pricing professionals and as such, firms are offering full training to transition into the specialism. To discuss a career in Transfer Pricing and the current roles available please contact one of our team:
North West & Yorkshire: Sandra McKinnon [email protected] 0161 503 0035
Scotland: Amy Borthwick [email protected] 0131 603 8111