WTP Advisors Acquires World-Class Transfer Pricing Firm

WHITE PLAINS, N.Y., May 2, 2011 /PRNewswire/ -- WTP Advisors, the award-winning tax and business advisory firm, has acquired the transfer pricing and international structuring business of Michael J. Flaherty LLC, an acclaimed transfer pricing firm which advises on cross border transactions to the largest multinationals in the world.  Under the terms of the acquisition, the new division will be named WTP Cross Border and will be led by Michael Flaherty, a transfer pricing lawyer with over 20 years' experience.

"The U.S. is the grandfather of transfer pricing law and interpretation, and Michael is an expert in the field," says Ian Boccaccio, co-founder and Partner of WTP Advisors, "given the enormous growth in this area, we are excited to have him on board to help clients optimize their tax positions through strategic transfer pricing planning."

Transfer pricing(see Appendix A) refers to the way in which a multinational company prices goods, services, intangibles and capital to and among its foreign affiliates. It is one of the most important business and tax considerations facing any multinational business -- the numbers of which are growing because even small to mid-size organizations are doing business in more than one country. Transfer pricing also has become one of the most contentious areas of reporting between taxpayers and the relevant tax regulators, because each country in which a company's affiliate is located has a vested interest in seeing that earnings and taxes are fairly reported in its jurisdiction.

"Anticipating and preparing for controversy is one of WTP Advisors' core strengths.  WTP Cross Border includes professionals with extensive industry experience and tax controversy backgrounds who will minimize the risks associated with transfer pricing policies, and best position clients to defend their related tax positions in any country in the world," says Boccaccio.

According to Flaherty, the U.S. has had an important role in developing global awareness and understanding of transfer pricing, and the rich history of U.S. experience in developing transfer pricing through case law and regulatory interpretation provides a deep well of experience from which WTP Cross Border will be able to draw.

"The good news for multinationals is that most countries look to the OECD Transfer Pricing Guidelines for their approach to transfer pricing, and that provides some consistency in both interpretation and documentation requirements," says Flaherty.

Additionally because the U.S. has been instrumental in the development of transfer pricing regulations, including the formulation of the OECD Guidelines, Flaherty feels that this long history working with transfer pricing concepts puts WTP Advisors in a better position to offer a truly global approach to transfer pricing.

WTP Cross Border is designed to help companies develop transfer pricing strategies and documentation to improve their bottom line and reduce their tax risk. In addition to developing strategies and documentation to meet reporting obligations, WTP Cross Border will help companies follow through on implementing the strategies.

"With the right strategies, transfer pricing can be a cornerstone of a company's financial success," says Boccaccio, "because smart tax strategies are merely one aspect of transfer pricing planning. Companies often see other major benefits as a by-product of the planning process."

For example, an industrial products company with high-cost manufacturing or distribution models might ask WTP Cross Border for help in streamlining its supply chain and minimizing tax costs without huge disruptions.  

"We do this by digging deep into a company's internal processes and teaming up with a variety of disciplines, such as managers responsible for R&D, manufacturing, sales and marketing and finance, in order to identify value drivers in the company and in the industry that will allow us to spot important opportunities as well as potential risks," says Flaherty.

Flaherty believes that WTP Cross Border's approach to transfer pricing planning is ideal because the initial analysis created when starting a transfer pricing study can identify so many opportunities for improvement, that it can be used by management as a tool to speed decisions and optimize business operations in the future.

In other words, WTP Cross Border's approach delivers on both the tax strategy side, as well as the business advisory side.

"This is what sets WTP Advisors apart. We can add significant, sustainable value that goes well beyond tax minimization strategies or statutory compliance," says Boccaccio.

About Michael Flaherty

Michael Flaherty is an attorney whose global practice has focused on international business and tax structures with an emphasis on transfer pricing.  His transfer pricing practice encompasses planning and preparation of U.S. and foreign transfer pricing studies and full documentation, including economic analysis, intercompany agreements and licenses and defense relating to U.S. and foreign tax audits.  His practice also encompasses preparation of advanced pricing agreements and preparation of complex documentation to support tax planning and structuring.  His clients include public and private companies headquartered in North America, Europe and Asia. 

WTP Advisors is a leader in tax and business advisory services for a global marketplace. Our highly skilled professionals equipped with years of industry experience, coupled with our cutting-edge technologies, make substantive and long-term differences to an organization's profitability. WTP Advisors is headquartered in White Plains, New York, with offices across North America, Asia and Europe.

Appendix A

About Transfer Pricing

Approximately fifty countries have followed the U.S. lead into transfer pricing, creating their own transfer pricing laws, interpretations and reporting requirements. The IRS and its regulatory counterparts in other countries have identified transfer pricing as a major international tax issue and have targeted transfer pricing for special scrutiny.

There are four main areas of transfer pricing. Each looks at intercompany transactions across borders:

1. Sales of tangible products.
2. Transfer and licensing of intellectual property.
3. Provision of services among affiliates.
4. Intercompany loans and other capital transfers.

Tax authorities often assume that multinational businesses are effecting transfer pricing strategies that strip earnings from high tax jurisdictions and push income into low or zero tax jurisdictions.  This assumption leads taxing authorities to examine the transfer pricing policies and practices of multinationals doing business in their country, and can lead to burdensome documentation requirements and aggressive audits.  It is increasingly important for multinational businesses to develop forward-looking transfer pricing policies and contemporaneous documentation in order to effectively and efficiently rebut these assumptions and thereby avoid risky and costly tax assessments and litigation.  

SOURCE WTP Advisors