Transfer Pricing Services

MDW Consulting Inc. works directly with your team, applying our experience and expertise in transfer pricing for companies preparing or defending themselves against difficult or unique circumstances.

MDW advises on related party transactions for the:

  • Acquisition, use and value of intangibles
  • Sale of products
  • Provision of services
  • Cost contribution / sharing arrangements
  • Financial transactions

MDW covers the full transfer pricing cycle of:

1. Planning

Matthew Wall’s unique skill set as a Chartered Accountant, Chartered Business Valuator and expert in transfer pricing uniquely qualifies him to assist companies that are planning to start, buy, sell, expand or restructure their business.

MDW will review materials and attend meetings to identify and explain the relevant transfer pricing and valuation issues and opportunities, and work with a company and its advisors to ensure the project identifies and aligns (i.e., not conflicts) with the other objectives for business, legal, accounting, tax, valuation and other factors.

2. Implementation

This is an important step requiring the departments in operations, accounting, tax, legal, IT, etc. to make certain changes in a company’s contracts, records and systems to reflect and administer the key aspects of the inter-company policies.

Matthew Wall spent three years as the in-house transfer pricing expert for the Bank of Montreal at an important time when the organization went through significant changes involving restructuring, SOX compliance, FAS 109 and FIN 48 implementation, regulatory reviews and other concerns. Matthew continues to advise large public and private companies that are at different stages of the same or similar changes.

3. Documentation

In Canada, a company must file a tax form (the “T106”) each year with the Canada Revenue Agency (“CRA”) reporting significant details for all of its inter-company transactions that, in total, exceed $1 million. This form also asks if “contemporaneous documentation” has been prepared to determine, document and support the “arm’s length” pricing of these transactions. The Internal Revenue Service (“IRS”) has a similar tax form called the “5471/2” and so do many other countries.

Contemporaneous documentation in Canada and the US typically refers to a report consisting of:

• Statement of Facts including a detailed write-up on the industry, business,
  and functional activities;

• Summary of the inter-company transactions including an explanation of the   best or most reliable transfer pricing method (choosing from five or six   methods) for pricing each transaction; and,

• Financial Analysis of the inter-company transactions; and,

• Analysis of third party transactions or companies to show the company   charged or paid an “arm’s length” amount on the same terms had it entered   into these transactions with an independent third party.

MDW will advise companies on the merits of a domestic vs. global strategy for documenting inter-company transactions, and will assist in the preparation of this information to the extent needed. MDW recommends, if possible, to prepare transfer pricing documentation in phases or “building blocks” based on the assessment of risk for a material error in the financial statements and tax returns.

4. Dispute Resolution

At a future date, the CRA will issue a written letter requesting your contemporaneous documentation, giving the company three months to respond, which is the start of an international audit. The IRS has a similar letter that requires a response within 30 days. MDW has a unique approach and significant experience in defending companies at all stages of a dispute including the field audit, requests for the Competent Authority, Appeals and Advanced Pricing Agreements.

Early in his career, Matthew Wall worked for several years in forensic investigations and litigation support, with exposure to the litigation process, court room and the arena for Alternative Dispute Resolutions. This experience is the cornerstone of what differentiates Matthew from other transfer pricing experts, and will be valuable for those Companies defending themselves against difficult or unique circumstances.