Shulman warns directors to take note of transfer pricing strategies
October 21, 2009
The commissioner of the IRS, Doug Shulman, has told board directors that they should be paying attention to their tax department's transfer pricing policies
“I am suggesting that you, the leaders of your organisations, should have a mechanism to oversee tax risk as part of your governance process,” said Shulman in a speech at the National Association of Corporate Directors (NACD) governance conference on October 19.
He suggested specifically addressing “transfer pricing and the relative profit allocated to low-tax jurisdictions, [in order to] make sure they reflect real economic contributions made in those jurisdictions”.
Shulman acknowledged it was out of the norm for the commissioner of the IRS to address the NACD, but stressed the importance of the role that boards of directors can play in overseeing tax risk and tax strategies of corporations.
“After all, taxes are one of the biggest expenses of a corporation, so how they are managed is very important to most corporations,” he said.
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