Transfer pricing and you (all multinational companies)

Yesterday it emerged (see full FT article) that the Special Commissioners - a tribunal that hears appeals against Revenue decisions - ruled last month that DSG did not properly account for the contracts as they were moved between a series of subsidiaries. This was the first time it had handed down a decision on transfer pricing arrangements, and is a land-mark ruling as far as other multinational companies are concerned. i.e. the Revenue Commissioners will use the ruling to re-open negotiations with other multinational companies, as part of government moves to increase tax recovery following yesterday's budget.
As you know Transfer pricing refers to the pricing of contributions (assets, tangible and intangible, services, and funds) transferred within an organization. It can be advantageous to arbitrarily select prices such that, in terms of book-keeping, most of the profit is made in a country with low taxes, thus shifting the profits to reduce overall taxes paid by a multinational group.
Obviously governments have made attempts to recover taxes on sales of products made within their juristriction by 're-pricing' transfer-prices. When you consider the number of ways in which prices can be 're-priced' (i.e. The OECD Guidelines refer to the following methods as 'traditional transaction method': Comparable Uncontrolled Price method (CUP); Resale Price Method (RPM); and Cost Plus Method (CP method or C+); and these are different from the tranactional profit methods such as Profit split method; and Transactional Net Margin Method (TNMM).) You can appreciate that this is going to become more distracting as the government pursues this approach....
This is worth passing on within your company
We shall keep you informed of further implications as the issue develops….