I have started collecting statistics on the demand for transfer pricing professionals in the United States. A copy of my first results is attached here. Comments welcome! LE
http://www.voxprof.com/eden/Teaching/DEMAND%20FOR%20TRANSFER%20PRICING%20SPECIALISTS-Nov-7-2006-2.pdf
Friday, November 17, 2006
Calling All Transfer Pricing Professionals - need your help
In January 2007, I will start to teach a graduate seminar on International Transfer Pricing to between one and two dozen graduate students at Texas A&M University. I have started designing the course (see http://www.voxprof.com under "Transfer Pricing"). Since we have only 14 weeks (January-May) and there are far more possible topics than there are weeks, it would be helpful to have some input from professionals currently working in this area as to which topics are "must do", which are "nice but not necessary" and which are "a waste of time". So I have designed a little survey and am inviting transfer pricing professionals around the world to tell which topics they see as most/somewhat/least relevant -- from a practicing transfer pricing expert's viewpoint. To launch the survey, please click the link below:
Click here to take survey'>Click'>http://www.surveymonkey.com/s.asp?u=544452909987"> Click here to take survey
It should take about 10 minutes of your time, max. Thanks! Lorraine Eden
Click here to take survey'>Click'>http://www.surveymonkey.com/s.asp?u=544452909987"> Click here to take survey
It should take about 10 minutes of your time, max. Thanks! Lorraine Eden
Tuesday, September 12, 2006
Transfer Pricing in the News
GlaxoSmithKline to Settle Tax Dispute With U.S.
By REUTERS
Published: September 12, 2006
LONDON, Sept. 11 ( Reuters) — GlaxoSmithKline, Europe’s biggest drug maker, said Monday that it would pay $3.1 billion to settle a tax dispute with the United States government that was set to go to trial next year.
GlaxoSmithKline said the settlement would not have any significant impact on its reported earnings or tax rate, and its shares rose 0.7 percent in London.
The Internal Revenue Service claimed back taxes from Glaxo after saying that the company had engaged in “transfer pricing,” a practice meant to minimize United States taxable profits by overpaying foreign subsidiaries for product supplies.
The settlement covers an original dispute for the period 1989 to 2000, which was to go to trial in February 2007, as well as the years 2001 to 2005.
[“We have consistently said that transfer pricing is one of the most significant challenges for us in the area of corporate tax administration," Mark W. Everson, I.R.S. commissioner, told The Associated Press. “The settlement of this case is an important development and sends a strong message of our resolve to continue to deal with this issue.”]
Navid Malik, an industry analyst at the stockbroker Collins Stewart, said of Glaxo: “They were never going to end up paying nothing and this figure is within the ballpark of what people were expecting.” He added that the settlement “effectively clears an overhang that people were worried about and means investors can focus on the fundamentals at Glaxo.”
The dispute with the I.R.S. goes back to a 1992 audit by the tax authority of Glaxo Wellcome, which later merged with SmithKline Beecham to form GlaxoSmithKline.
By REUTERS
Published: September 12, 2006
LONDON, Sept. 11 ( Reuters) — GlaxoSmithKline, Europe’s biggest drug maker, said Monday that it would pay $3.1 billion to settle a tax dispute with the United States government that was set to go to trial next year.
GlaxoSmithKline said the settlement would not have any significant impact on its reported earnings or tax rate, and its shares rose 0.7 percent in London.
The Internal Revenue Service claimed back taxes from Glaxo after saying that the company had engaged in “transfer pricing,” a practice meant to minimize United States taxable profits by overpaying foreign subsidiaries for product supplies.
The settlement covers an original dispute for the period 1989 to 2000, which was to go to trial in February 2007, as well as the years 2001 to 2005.
[“We have consistently said that transfer pricing is one of the most significant challenges for us in the area of corporate tax administration," Mark W. Everson, I.R.S. commissioner, told The Associated Press. “The settlement of this case is an important development and sends a strong message of our resolve to continue to deal with this issue.”]
Navid Malik, an industry analyst at the stockbroker Collins Stewart, said of Glaxo: “They were never going to end up paying nothing and this figure is within the ballpark of what people were expecting.” He added that the settlement “effectively clears an overhang that people were worried about and means investors can focus on the fundamentals at Glaxo.”
The dispute with the I.R.S. goes back to a 1992 audit by the tax authority of Glaxo Wellcome, which later merged with SmithKline Beecham to form GlaxoSmithKline.
Sunday, August 13, 2006
Transfer Pricing Internships/Employment
In May 2007, I will be looking to place the first graduates of the International Transfer Pricing Module, along with students who have completed my Transfer Pricing course but have not finished all the courses for the ITP module. The students will be looking either for paid summer internships (if their coursework is not complete) or full-time positions in transfer pricing (if they are graduating). Bush School students in the MPSA and MPIA degree programs must complete internships between the first and second years of their program, as do PPA (Professional Program in Accounting) and MBA students.
If your firm or organization is interested in hiring one or more of my students for a summer internship or a fulltime position in transfer pricing starting in or after May 2007, please contact me at leden@tamu.edu or phone 979-862-4053. Thanks! LE
If your firm or organization is interested in hiring one or more of my students for a summer internship or a fulltime position in transfer pricing starting in or after May 2007, please contact me at leden@tamu.edu or phone 979-862-4053. Thanks! LE
Draft of Transfer Pricing Course Syllabus
A draft copy of the Course Syllabus for the new International Transfer Pricing course is attached as a link and also published in PDF form on my website at http://www.voxprof.com. Check under "Transfer Pricing" or "What's New". Comments and suggestions are welcomed. I will be working on the Required Reading list this fall. The course starts in January 2007 and runs for 14 weeks. It is open to graduate students at Texas A&M and students registered in the Bush School's Certificate in Advanced International Affairs. LE
Draft of New Transfer Pricing Module
I attach a draft of the new International Transfer Pricing Module (ITPM), for comment. A PDF version is posted on Vox Professori at http://www.voxprof.com; check under "Transfer Pricing" or "What's New". Thanks! Lorraine Eden
-----------------
NEW - The International Transfer Pricing Module
1. What Is Transfer Pricing?
Globalization has become a strategic practice in Fortune 500 firms, both in terms of manufactured goods that have been produced offshore for more than two decades and the recent growth in offshored business services and intangibles. As a result, more than one-third of world trade in goods, services and intangible assets occurs between firms that are related to one another, for example, between two subsidiaries of a multinational enterprise (MNE). Trade between related firms is called intrafirm trade. The price of an intrafirm transaction, called a transfer price, affects the allocation of profits between the buyer and seller firms; a high transfer price shifts profits to the seller, a low price to the buyer. When intrafirm trade crosses national borders, it is called international transfer pricing, or simply transfer pricing.
Transfer pricing, by changing the value of cross-border transactions, can have huge impacts on the distribution of MNE worldwide profits among countries, and therefore on the division of national tax revenues, in addition to affecting trade flows, the balance of payments and national competitiveness. As a result, almost 50 national tax and customs authorities now regulate transfer prices. Transfer pricing issues involve many different professionals: economists, lawyers, accountants, auditors, financial officers, business managers, and government policy makers. Transfer pricing professionals are employed in government departments (e.g., US Treasury), MNEs with in-house transfer pricing groups, and firms that specialize in transfer pricing issues (e.g., legal, consulting and accounting firms). International organizations such as the Organization for Economic Cooperation and Development and the International Bureau of Fiscal Documentation also have transfer pricing staff.
The demand for transfer pricing professionals has escalated rapidly over the past ten years, driven not only by globalization, but also by the increasing number of governments and government regulations. Controversies surrounding the “right” transfer price or the “best” method for valuing intrafirm transactions have created enormous job opportunities. A September 2005 study of five websites (AOL Job Search with Career Builder, Monster.com, USA Jobs, Executive Registry and WSJ Career Journal) compared job openings in six areas (international development, international economics, international finance, international tax, international trade, and transfer pricing). Transfer pricing ranked second, after international taxation, in terms of the number of posted openings.
2. International Transfer Pricing Module
In Fall 2006, Texas A&M University is starting a new program, an International Transfer Pricing Module (ITPM), to address the demand for more transfer pricing professionals. Modules or concentrations are small groups of courses, clustered in a single topic area, offering students the opportunity to specialize in an area of interest where they potentially might find employment after graduation. The ITPM may be taken as part of a regular degree program, or as an add-on program, by graduate students at Texas A&M University. The program should be of particular interest to the following groups of masters students:
-----------------
NEW - The International Transfer Pricing Module
1. What Is Transfer Pricing?
Globalization has become a strategic practice in Fortune 500 firms, both in terms of manufactured goods that have been produced offshore for more than two decades and the recent growth in offshored business services and intangibles. As a result, more than one-third of world trade in goods, services and intangible assets occurs between firms that are related to one another, for example, between two subsidiaries of a multinational enterprise (MNE). Trade between related firms is called intrafirm trade. The price of an intrafirm transaction, called a transfer price, affects the allocation of profits between the buyer and seller firms; a high transfer price shifts profits to the seller, a low price to the buyer. When intrafirm trade crosses national borders, it is called international transfer pricing, or simply transfer pricing.
Transfer pricing, by changing the value of cross-border transactions, can have huge impacts on the distribution of MNE worldwide profits among countries, and therefore on the division of national tax revenues, in addition to affecting trade flows, the balance of payments and national competitiveness. As a result, almost 50 national tax and customs authorities now regulate transfer prices. Transfer pricing issues involve many different professionals: economists, lawyers, accountants, auditors, financial officers, business managers, and government policy makers. Transfer pricing professionals are employed in government departments (e.g., US Treasury), MNEs with in-house transfer pricing groups, and firms that specialize in transfer pricing issues (e.g., legal, consulting and accounting firms). International organizations such as the Organization for Economic Cooperation and Development and the International Bureau of Fiscal Documentation also have transfer pricing staff.
The demand for transfer pricing professionals has escalated rapidly over the past ten years, driven not only by globalization, but also by the increasing number of governments and government regulations. Controversies surrounding the “right” transfer price or the “best” method for valuing intrafirm transactions have created enormous job opportunities. A September 2005 study of five websites (AOL Job Search with Career Builder, Monster.com, USA Jobs, Executive Registry and WSJ Career Journal) compared job openings in six areas (international development, international economics, international finance, international tax, international trade, and transfer pricing). Transfer pricing ranked second, after international taxation, in terms of the number of posted openings.
2. International Transfer Pricing Module
In Fall 2006, Texas A&M University is starting a new program, an International Transfer Pricing Module (ITPM), to address the demand for more transfer pricing professionals. Modules or concentrations are small groups of courses, clustered in a single topic area, offering students the opportunity to specialize in an area of interest where they potentially might find employment after graduation. The ITPM may be taken as part of a regular degree program, or as an add-on program, by graduate students at Texas A&M University. The program should be of particular interest to the following groups of masters students:
- Mays Business School: Masters in Business Administration (MBA), Professional Program in Accounting (PPA), other Masters degree programs.
- George Bush School: Masters in International Affairs (MPIA), Masters in Public Service and Administration (MPSA), Certificate in Advanced International Affairs (CAIA).
- Economics: Masters and PhD students in Economics who want a career in the private or public sector.
- Law: LLB students interested in specializing in international tax and/or transfer pricing law.
The Bush School’s MPIA faculty met in Spring 2006 and agreed to introduce five modules starting in Fall 2006. Students must take at least three courses to fulfill the requirements of a module, including one core course. The ITPM is one of the new modules. The recommended program for ITPM is:
- BUSH 689 International Transfer Pricing (new, required course offered in Spring 2007)
- BUSH 629/MGMT 667 Multinational Enterprises (offered in Spring 2007).
- At least one course from the list below
o ACCT: Course selection to be determined based on the student’s background and interests.
o BUSH 625 Advanced Trade Policy
o BUSH 626 International Finance OR FINC 645 - International Finance
o BUSH 632 Quantitative Methods II in Public Management - MPIA and MPSA students are also strongly encouraged to take a summer internship in transfer pricing between their first and second year programs.
3. ITPM Coordinator
The coordinator for the new ITPM is Dr. Lorraine Eden, internationally recognized expert on transfer pricing. Lorraine Eden is Professor of Management and University Faculty Fellow at Texas A&M University, where she teaches undergraduate and graduate courses on multinational enterprises and the economics of international business. Prof. Eden's research focuses on the political economy of multinationals, specializing in transfer pricing, international taxation and regional integration. She has more than 100 scholarly publications, including journals such as Academy of Management Review, Academy of Management Journal, Canadian Journal of Economics, and Journal of International Business Studies. Her best-known book is Taxing Multinationals (University of Toronto Press, 1998). Her current research projects include strategic transfer pricing and empirical estimates of transfer price manipulation; foreign direct investment (FDI) in tax havens and corrupt economies; MNE strategies within NAFTA; and MNE strategies for coping with liability of foreignness. Professor Eden is Deputy Editor-in-Chief of the Journal of International Business Studies, and sits on several editorial boards. She has been a Fulbright Scholar, a Pew Fellow, and a receiver of multiple teaching, research and professional awards including election as a Fellow of the Academy of International Business (AIB) in 2004. She is the founder of WAIB (Women in the Academy of International Business), an organization with more than 500 members worldwide. Professor Eden runs executive training workshops and consults on transfer pricing and international taxation. Currently, she is working with the US Bureau of Labor Statistics to redesign the US export and import price indexes to more accurately reflect intrafirm transactions within MNEs. More information is available on her website http://www.voxprof.com/.
4. Want to Learn More?
Contact: Prof. Lorraine Eden, Dept. of Management, Texas A&M University, TAMU 4221- 415D Wehner Bldg, College Station, Texas 77843-4221 USA. Phone 979-862-4053. Fax 979-845-9641. Email: leden@tamu.edu.
Wednesday, July 26, 2006
New Transfer Pricing Module
In Fall 2006, I will be launching a new program at Texas A&M in transfer pricing. Graduate students will be able to take a Module in Transfer Pricing consisting of four courses:
(1) a graduate course on multinational enterprises such as Multinational Enterprises (MGMT/IBUS 667, crosslisted as BUSH 627), Global Corporate Strategy, International Business, or International Management.
(2) a new graduate course on Transfer Pricing that I will be teaching in Spring 2007, listed initially as MGMT/BUSH/IBUS 689.
(3) an Accounting course, selected according to the student's background in accounting.
(4) one other course, selected according to the student's background and professional interests.
Most students will also complete a summer internship in a transfer pricing firm or organization prior to graduation.
Students for this program will come primarily from the Mays Business School and the George Bush School of Government and Public Service (the two units co-hosting the program), but the module will be open to graduate students from across campus, for example, MA and PhD students in Economics who want professional careers in transfer pricing.
Eventually, I hope to expand this module into a full-fledged Certificate Program in Transfer Pricing, with a distance learning option.
(1) a graduate course on multinational enterprises such as Multinational Enterprises (MGMT/IBUS 667, crosslisted as BUSH 627), Global Corporate Strategy, International Business, or International Management.
(2) a new graduate course on Transfer Pricing that I will be teaching in Spring 2007, listed initially as MGMT/BUSH/IBUS 689.
(3) an Accounting course, selected according to the student's background in accounting.
(4) one other course, selected according to the student's background and professional interests.
Most students will also complete a summer internship in a transfer pricing firm or organization prior to graduation.
Students for this program will come primarily from the Mays Business School and the George Bush School of Government and Public Service (the two units co-hosting the program), but the module will be open to graduate students from across campus, for example, MA and PhD students in Economics who want professional careers in transfer pricing.
Eventually, I hope to expand this module into a full-fledged Certificate Program in Transfer Pricing, with a distance learning option.
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