{"id":9190,"date":"2020-04-24T15:25:51","date_gmt":"2020-04-24T13:25:51","guid":{"rendered":"https:\/\/www.bacciardipartners.it\/?p=9190"},"modified":"2021-10-29T11:39:49","modified_gmt":"2021-10-29T09:39:49","slug":"adjustment-to-transfer-pricing-policies-during-coronavirus","status":"publish","type":"post","link":"https:\/\/www.bacciardipartners.it\/en\/adjustment-to-transfer-pricing-policies-during-coronavirus\/","title":{"rendered":"ADJUSTMENT TO TRANSFER PRICING POLICIES DURING CORONAVIRUS"},"content":{"rendered":"

By Tommaso Fonti, LL.M. and Dott. Denis Amici<\/u> – <\/a>International Taxation Department<\/a><\/p>\n

The Covid-19 emergency will have an impact on the performance of multinational corporate groups (MNE groups) and, consequently, on economic analyzes aimed at verifying the compliance of transfer prices with free market values.<\/p>\n

\"transfer_pricing_Bacciardi\"Download printable .pdf version<\/a><\/p>\n

In the current climate of general uncertainty, MNE groups will have to carefully consider whether it is appropriate\/necessary to revise transfer pricing policies, in particular whether to renegotiate intra-group prices with foreign affiliates and how to allocate losses or extra profits resulting from the Covid-19 crisis among group companies.<\/p>\n

Normally, in intra-group transactions, losses and extra-profits are allocated to the group company that performs value-added functions and bears the higher risks, but the current crisis situation is so extraordinary and has such an impact on the entire value chain that is necessary to carefully consider whether and how to revise this general approach.<\/p>\n

MNE groups should assess the impact of coronavirus on transfer pricing policies in order to decide:<\/p>\n

1) whether to renegotiate the terms and conditions of the contractual relationships currently in place with its foreign subsidiaries, in the light of the conduct adopted in comparable transactions with third and independent parties (customers or suppliers);<\/p>\n

2) whether and what corrections should be applied to the benchmark analyses that will be carried out through the appropriate databases in 2021, with reference to the tax year 2020.<\/p>\n

In this regard, MNE groups can in particular assess whether:<\/p>\n