Transfer pricing software: a market perspective

By: Steef Huibregtse, Peter Andersen, Chris Mason and Stephen Sinfailam.

The use of transfer pricing software is not a recent development within the industry. Transfer pricing software packages were initially designed to automate rudimentary transfer pricing activities such as benchmarking and documentation. The software developers claimed that a revolution would happen in the market, where software would empower multinational enterprises (MNEs) to take responsibility for their own transfer pricing; and at the same time reduce costs of outsourcing to external consultants.

However, since their release over a decade ago, many of the efficiencies promised by software developers have not materialised; and the ‘revolution’ of the transfer pricing industry was not forthcoming.

It is through these observations that Transfer Pricing Associates (‘TPA’) recognised a gap between what software developers could deliver and what functionality MNEs expected the software to perform. Thus, to further analyse why corporates have shied away from this software, TPA surveyed the in-house tax professionals of twelve multinational companies during 2008 to collate information on their experiences and perceptions of transfer pricing software, as well as how in-house professionals manage transfer pricing for their organisation.

This article summarises the major findings of the survey TPA conducted.

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