Transfer Pricing Issues When Dealing With Trusts, Foundations, And Similar Arrangements

While most transfer pricing rules will apply to large multinational enterprise (MNE) groups, family offices, foundations, and trusts cannot ignore them. There has been substantive growth of such entities managing or owning investments for one or more wealthy families despite the complex regulatory environments and emerging risks.

An essential aspect of global family office management relates to understanding and navigating the intricate interplay of international relations, global conflicts, and diplomatic developments while shaping the strategies and priorities of family offices worldwide. The cross-border nature of investments under such structures makes them subject to scrutiny under the implementation of the base erosion and profit shifting (BEPS) initiative that saw the revision of the transfer pricing guidelines and the later implementation of the proposed "GloBE Rules."

In their chapter "Transfer Pricing Issues When Dealing with Trusts, Foundations, and Similar Arrangements" in Taxation of Trusts, Foundations and Similar Arrangements in a Global Setting published by Wolters Kluwer, Managing Director Amanda Pletz and Economic Analyst Ayushi Rungta explore the transfer pricing considerations for family offices, foundations, and trusts and aim to demonstrate transfer pricing issues faced in the form of case studies. As family wealth extends across generations, effective risk management and compliance with transfer pricing regulations emerge as top priorities. This chapter emphasizes the importance of navigating transfer pricing challenges with diligence and anticipation, ensuring intercompany transactions align with regulatory requirements while optimizing investment opportunities for future generations.

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