Just a quick reminder for those of you working at multinational companies which operate on a calendar year basis – do not forget to ask your tax colleagues whether any retroactive transfer pricing adjustments were made at, or before, year end.
If such adjustments were made (whether upward or downward), please be sure to consider the customs valuation implications here in the United States and elsewhere. The failure to declare upward transfer pricing adjustments is becoming an increasingly common enforcement issue in many jurisdictions (largely because the issue is so easy to identify and often involves significant amounts/penalties); whereas downward adjustments could lead to a refund of customs duties, taxes and fees in some jurisdictions (including the US, the EU and, based on some recent developments, now Canada). A quick note to your tax colleagues now could save a potential headache down the line.
As part of our customs compliance assessment process, we have developed a questionnaire tailored to these issues for sending to your in-house tax colleagues. If you think the questionnaire would be helpful to you, just let me know.