COVID-19: Aligning transfer pricing strategy

In light of the ongoing COVID-19 crisis, multinationals are readjusting their supply chains and business models to meet the ever-changing demands of the new ‘now’.

The changing business environment, characterised by demand and supply disruptions, health and safety concerns, evolving government regulations and varying business forecasts may alter pricing policy for organisations. As a result, it is important that transfer pricing is at the top of the organisation’s strategic agenda.

Here’s how you can HALT and assess your business models and transfer pricing approach

• Impact analysis at industry and business level
• Realignment of transfer pricing model with current business and market realities
• Consider closed or temporarily halted operations or idle capacity and new allocation of workforce
• Consider reviewing targeted transfer pricing models and impact on treasury
• As transfer pricing policies are directly linked to business value chains and market forces, rethinking transfer pricing frameworks of MNCs is inevitable and a top priority.

Grant Thornton in India, along with its network firms, is keeping a close watch on the evolving scenario and can assist in aligning your global transfer pricing policies and strengthening your strategic and operational responses to the new market order in a globally coordinated manner.