Tax & Legal How to allocate your intercompany profit?

The days of having a list of intercompany transactions documented in a local file for transfer pricing are gone. If you are running an international business, Tax authorities expect to see you whole profit pie, and how you have sliced it between entities and geographies. This more holistic approach is trying to get to a more sustainable “profit allocation” to balance the interest between taxpayers and tax authorities.

This shows how to convert your qualitative vca to a quantitative vca and in turn allows you to allocate your intercompany profits more objectively.
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