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UHY GLOBAL TRANSFER PRICING GUIDE 2015
Global accountancy network UHY released its 2015 GLOBAL TRANSFER PRICING GUIDE to assist tax and finance professionals within multinational companies or those considering cross-border ventures. Given the complexity of transfer pricing issues, the guide provides in the first instance a country-by-country summary of major transfer pricing requirements, including pricing methods, documentation and penalties covering 80 countries.
UHY member firm transfer pricing specialists work together to deliver global solutions for clients that protect against the threats posed by transfer pricing legislation. Advising on prices for intra-group transactions, using proven economic databases to recommend prices which maximize legitimate tax savings whilst minimizing the risk of successful challenges by national tax authorities.Transfer pricing has taken on greater significance, not just in terms of complying with the rules in each country, but also as a planning tool in minimizing a multinational group's global tax burden.
UHY LLP works closely with clients to:
- Determine if selected transfer pricing methods comply with the requirements of the jurisdictions concerned
- Reduce the potential for double tax while minimizing the worldwide tax burden
- Meet all documentation and reporting requirements
- Assist with any audits by tax authorities
- Make appropriate applications for advance pricing agreements (APAs)
As tax rules are continually changing, these details are intended for general guidance only. Therefore, this guide cannot and does not provide definitive guidance on which to base specific decisions.
To discuss the implications of transfer pricing for your business, please contact your professional at UHY LLP in Detroit, Farmington Hills or Sterling Heights with any queries you may have.
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EXPOSURE DRAFTS ISSUED FOR PROPOSED ACCOUNTING STANDARDS
By Matt Baker
The Financial Accounting Standards Board (FASB) has decided to explore the option of simplifying the standards in relation to deferred tax assets and liabilities from a reporting and classification standpoint. After many sleepless months, the FASB has proposed two accounting standard updates.
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1. Intra-entity asset transfers and;
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2. Balance sheet classification of deferred taxes
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The two proposals were issued on Jan. 22, 2015 and the comment period will extend until May 29, 2015.
The first proposal in regards to intra-entity asset transfers is in effort to "eliminate the exception in GAAP that prohibits recognizing current and deferred income tax consequences for an intra-entity asset transfer until the asset or assets have been sold to an outside party. Consequently, this proposal requires that an entity recognize the current and deferred income tax consequences of an intra-entity asset transfer when the transfer occurs". This proposal would be in convergence with the current standards for IFRS. For public entities, the proposal would be effective for periods beginning after Dec. 15, 2016 with early adoption not permitted. For all other entities, the proposal would be effective for annual periods beginning after Dec. 15, 2017 and Dec. 15, 2018 for interim periods with early adoption not permitted.
Disclosures would be required for the nature and reason of the change in accounting principle, and the quantitative effects of the change.
The second proposal in regards to balance sheet classification of deferred taxes, would only affect entities that present a classified statement of financial position. Currently, GAAP requires deferred tax assets and liabilities to be classified into current and non-current classifications which can be costly and often conflict with financial user usefulness and benefit, and often do not accurately reflect the time period in which the amounts are to be recovered or settled.
In order to simplify the classification process and also reduce the costs involved with tracking, the proposal suggests classifying these tax deferrals as non-current. The proposal would not amend the current standard that deferred tax assets and liabilities be netted and presented as a single amount. This proposal also converges with the current standards of the IFRS.
For public entities, the proposal would be effective for annual periods; including interim periods within the annual period, beginning after Dec. 15, 2016 with early adoption not permitted. For all other entities, the proposal would be effective for annual periods beginning after Dec. 15, 2017 and interim periods in annual periods beginning after Dec. 15, 2018 with early adoption not permitted.
Comments to the FASB can be submitted during the comment period (May 29, 2015) in one of three ways:
1. By using the electronic feedback form on the FASB Website |
2. Emailing a written letter to director@fasb.org with file reference No. 2015-200-I or No. 2015-210-II | |
3. Mailing comments to 401 Merritt 7, PO Box 5116, Norwalk, CT, 06856-5116, addressed to technical director and with applicable file reference (No. 2015-200-I or No. 2015-210-II, depending on the proposal the comments are responding to)
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For more information on the FASB proposals, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us on the web at www.uhy-us.com.
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INTERNATIONAL BUSINESS ISSUE 30
UHY International Business is a twice-yearly publication featuring articles on current business affairs in countries and business cultures around the world.
CLICK HERE TO DOWNLOAD YOUR COPY
Included in this issue:
India: Pipedream or reality?
India gives a whole new meaning to diversity. Will growth create one urban middle class whose interests transcend region, caste, religion by 2022?...
Asean: A region of complexities and contradictions
With a rising economic profile, investors are examining one of the world's most diverse, fast-moving and competitive regions...
Mexico: The new middle way
Mexico is on the move, empowered not just by large modern firms but small to medium-sized (SME) traditional businesses that are stepping up to take advantage of economic growth...
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UNCONSCIOUS BIAS IN AUDITING
By Anthony Rosenblum, CPA
During this time of year when a great number of companies are engaging public accounting firms for audit or review procedures, it may seem that auditors act overly suspicious when seeking additional support for what may be relatively routine processes. It comes as no surprise that maintaining independence is crucial to avoid having any bias cloud auditor judgment, and in that cornerstone of the industry lies the reason for such scrutiny. While most auditors can identify and discourage any obvious favoritism that may arise as the result of a close client-auditor relationship, there are a number of other potential biases that even skilled auditors may not be aware they are experiencing. Certain decision making shortcuts called heuristics can lead an auditor to making a partial decision without even realizing it. A recent study identified five such heuristics which can lead otherwise independent professionals to a biased decision making process.
| 1. When seeking reasonable support for account balances or fluctuations, individuals have a tendency to latch on to whatever support is most readily available. This is often an explanation from management or a similar circumstance recalled from another engagement. Either way, the mind is biased toward accepting the easily available answer as opposed to diving deeper for a potentially better explanation or support. | | 2. Particularly when dealing with estimates, it is often easier to work from a baseline and adjust to a final number than to develop an expectation independently. Unfortunately, auditors are often provided these baselines in the form of preliminary financial statements. Without even realizing it, they may be anchoring expectations to management's numbers and introducing a prejudice. | | 3. Due to the depth and breadth of experience auditors have acquired, it is common for individuals to approach even the most difficult engagements with confidence. When auditors encounter challenging or new audit areas, there may be a tendency to leverage management's experience in understanding support or calculations. An auditor's overconfidence in management's experience and his or her own ability to understand a difficult area may prevent them from seeking an expert's involvement when it is needed. | | 4. Similar to anchoring, the confirmation bias arises when an individual has a preset conclusion in mind when testing begins. By focusing on an already established target, auditors may not notice or ignore support which leads them away from what they expect to see. | | 5. Any of the biases noted above can be exaggerated when coupled with a rush to complete an area or an engagement. Particularly during busy times, an emphasis on speed and budget can cause auditors to accept an unconscious bias that they would normally be more conscious of. |
While any of the biases noted above may be present in an audit engagement, being mindful of them can greatly decrease the chances of an auditor impairing his or her independence. A review of these tendencies during planning stages and throughout fieldwork can be beneficial to the team and allow for a more effective and efficient audit.
For more information or questions on this topic, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040 or visit us on the web at www.uhy-us.com.
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SPECIAL ANNOUNCEMENTS
Volunteers from UHY-MI Spend the Day Mentoring DPS Students
Over 30 interns and new staff from UHY LLP Michigan's practice volunteered their time to mentor students at Burton International Academy, a Detroit public school, educating grades kindergarten-four. UHY made this happen by teaming up with Beyond Basics, a local 501c3 nonprofit organization working to improve literacy and raise reading proficiency in inner city schools.
"The children of Burton International Academy were thrilled to interact with interns from UHY in our Beyond Basics rooms. Creating ways for engagement such as this has a lasting impact on these children. We applaud UHY for understanding the importance of community engagement and making it a priority in their intern program," said Karen O'Keefe, Beyond Basics' director of partnerships and development.
Volunteers read stories to kindergarten students, helped first and second graders read and write stories, or read along with third and fourth graders. Those from UHY who participated truly enjoyed the experience. Volunteers were overwhelmed by the abilities and enthusiasm of these students and were thankful for the time they were able to spend with them. "Working with the students was a great opportunity. They were very excited to read their favorite books, and seeing the students trying their hardest to read along shows that Beyond Basics is working hard to help them succeed", said UHY intern, Julia Basso.
Work done by this organization and its volunteers has been proven to have a huge impact on the direction and education of these impressionable young minds - especially with 47% of adults in Detroit being considered functionally illiterate.
"UHY and Beyond Basics have been working together in Detroit Public Schools for a few years now. Each time we connect with the organization and they set up mentoring opportunities for us, it is a rewarding experience and allows our staff to step back and embrace it knowing that they are making a difference in these students lives," said Rina Henning, recruiting manager.
Careers At UHY
Are you ready to take charge of your career path? Be sure to
visit our careers page for the most up to date career listings or contact Amanda Sheets at asheets@uhyus.com or 248 204
9482. Check out some of the current opportunities in our Michigan offices:
- Audit manager, 7+ years of experience, manufacturing experience is highly preferred
- Audit accountant, 2-10 years of experience working with municipalities
- Audit senior staff accountant, 2-4 years of experience
- Tax manager, 7-10 years of experience
- Tax senior accountant, 5-7 years of experience, CPA required
- Director of litigation, testifying experience required
- Senior associate (Corporate Finance), 2-4 years of Big 4 experience highly preferred
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Published by UHY LLP News.
Copyright © 2013 UHY LLP. All rights reserved.
Our firm provides the information in this newsletter as tax information and general business or economic information or analysis for educational purposes, and none of the information contained herein is intended to serve as a solicitation of any service or product. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of "UHY Advisors." UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. "UHY" is the brand name for the UHY international network. Any services described herein are provided by UHY Advisors and/or UHY LLP (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.
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