This article is written by Team iPleaders.
The economic landscape has gone through a significant transformation with the spread of digital economy and globalisation. A company manufactures its products in Bangladesh, packages it in Myanmar and ultimately sells it in the market of India.
MNCs are engaging in cross border transactions more than ever and their profit is coming under the scanner of authorities for taxation. Enterprises located across the border are carrying out huge amount of transactions with their facilities in India and all of it falls under transfer pricing regulations.
The Implementation of Transfer Pricing
The controlled transactions carried out between two entities belonging to the same enterprise have come under the control of Indian transfer pricing laws. Introduced in 2001, transfer pricing has now become the main worry of CEOs and entrepreneurs causing huge number of litigations each year.
In a PwC study, 65% CEOs and MDs agreed that transfer pricing was one of the considerations while making strategic business decisions.
Transfer pricing is also going to be interlinked with SEBI Guidelines, the Companies Act 2013 and the Excise and Customs Regulations. The implementation of GST is further going to make it a major concern for businesses with cross country transactions.
Apart from MNEs, small startups are also operating on a global scale and their transactions also come under transfer pricing.
The Rising need of Transfer Pricing Experts
Global head of transfer pricing services of KPMG, Sean Foley, believes that organizations need to disclose a lot more on transfer pricing than they did before. He advocates for the Organisation of Economic Cooperation and Development (OECD) action plan, which can ensure that only the profits are taxed in places of the economic activity – avoiding double taxation.
However, it isn’t as simple as it sounds. A 2012 report by Ernst & Young, named Global Transfer Pricing Tax Authority Survey, highlighted how more jurisdictions were introducing transfer pricing requirements, which while ensured that there is a major transformation in tax laws, made things more complicated.
The complication of the transfer pricing laws and the exhaustive process of taxation, reporting, documentation has left many companies in the water. With the growth of companies and increase in legislation, understanding the nuances becomes a challenge.
91% companies say that they had been a victim of transfer pricing adjustments resulting in legal proceedings.
70% organizations counter transfer pricing adjustments and go to court against authorities.
It doesn’t need to be stressed that transfer pricing is a big worry to businesses nowadays!
Career Opportunities for Lawyers in Transfer Pricing
Transfer pricing experts, in India, need to look at any new regulations and policies by RBI and ensure proper compliance. But that is not the only area you can go to as a transfer pricing expert.
Finance professionals, accountants, lawyers, compliance advisors specializing in international taxation and transfer pricing are in high demand in India. Not just big companies, but the small ones are also going international and need a comprehensive international tax planning to tackle the transfer pricing issues.
National University of Juridical Sciences, Kolkata (NUJS) offers a unique course in Transfer Pricing which equips you with the skills and understanding required to comprehend business practices.
Lawyers have a wide range of career opportunities in the transfer pricing sector in various industries. The inaccurate implementation of the transfer pricing policies is a big concern for companies and also the Indian government.
So developing a comprehensive and strategic approach to transfer pricing on a global scale is really important. Even the Indian government had expressed its support for the cause.
Transfer pricing lawyers have already found employment in the Big 4 Indian companies who have their own transfer pricing team like KPMG, Ernst & Young and PwC.
Other business also are creating their own in-house team or taking help of transfer pricing consultants.
Now let’s see where lawyers can excel with their expertise in transfer pricing and international taxation.
Excellent Transfer Pricing Occupations for Lawyers
As a transfer pricing expert, you can expect to see a lot more of work in near future. With the Modi government allowing foreign law firms to open offices in India by 2019, there seems to be more opportunities than ever for you.
I bring to you some of the more common transfer pricing career options that you might want to try out.
If you’re looking to get into transfer pricing, you might want to join one of the Big 4 Firms if you’re lucky – or more specifically, Ernst & Young, KPMG, PwC or Deloitte.
All the Big 4 companies and increasing number of accounting firms have their own transfer pricing department. They offer consulting services to other companies all over the world.
Working with them, you can broaden your knowledge and experience in association with senior executives from various industries. Your technical knowledge of transfer pricing and the current trends will be always up to date as it is the prerequisite in this industry.
You will also get a chance to work alongside experts from other areas like Customs and Excise, International tax planning, corporate tax compliance, VAT and many more. This will lead to strong exposure and you will be able to develop insight into each of these processes.
If you aren’t as lucky to get through them, don’t worry. There are other transfer pricing career options too.
Industry and Commerce
In India, 83% companies have undergone transfer pricing audit.
The increasing number of transfer pricing litigations has prompted many businesses to set up an in-house transfer pricing team.
The main industries to open their doors to transfer pricing lawyers include the financial sector and the gas and oil industries. But the other sectors are also in the queue and looking for skilled professionals.
Working with a single company you can get up and close with the intricacies of the business. It will be possible understand the drivers of business and other nuances which will enable you to progress to a wider commercial role.
If you have a background in finance and corporate tax you can go on to become the head of the tax department. You could even get a job as an analyst at an office in India.
Transfer pricing also has a global scope and companies will go on expanding their capabilities in this domain. This gives you an excellent chance to become the international head of transfer pricing and lead the whole team.
An increasing number of law firms are also building up transfer pricing teams to meet the demand of businesses. You can join a law firm and render consulting services to companies from legal and tax perspectives.
You can scale the ladder of progression and reach the level of partnership like in case of law practice. The experience in working in a law firm can also help you in opening your own consultancy service.
New entrepreneurs and even seasoned businessmen hire business advisors for guiding them on the right track.
Though the role of business advisor may not be available to a transfer pricing graduate right on the beginning, you can work your way up there. Years of working in the industry with significant knowledge and exposure along with expertise in transfer pricing can expand your career opportunities.
You can become the key business advisor of an organization and get rewarded with increased pay and benefits. The success rate will be much higher if you can tie up with some international company.
Many financial experts and professional like Chartered Accountants get the responsibility of handling tax issues. But when it comes to international taxation and transfer pricing, they may not be able to carry out their role successfully.
The financial courses are not designed to make someone expert in the nuances of transfer pricing. Only a course in transfer pricing could do that.
If you are in the finance industry, expanding your knowledge and skill in transfer pricing can broaden your role and responsibilities. You can become a financial advisor and ask for a raise or other incentives.
Very few consultancies cater to the specific needs of transfer pricing. It is a new area and most of the current specialised consultancies are in their period of growth.
You can find employment in such consultancies as a transfer pricing lawyer. The firms generally offer a combination of analysis and economics approach working with other professionals for tax consultation.
Your experience and skill will develop working in close relation with other experts and you will be able to lead your own consulting or team in the future.
This career opportunity is perfect for the professionals who already have a background in finance, accounting, tax or corporate law. After getting a course in transfer pricing, you can expand your role and act as a consultant to businesses.
You may also open your own consultancy after working in a law or accounting firm and using the exposure and insight gained in the process. The scope of transfer pricing is ever expanding, and you can find more opportunities as businesses grow and scale.
To offer complete solutions to your clients you may need to hire or work with experts from other areas.
Banks and various financial institutions need lawyers more than anyone. When things are going good, they will need lawyers. When it is facing problems, they will need more lawyers. Maintaining compliance, determining the feasibility of new products and services, handling litigations, providing advice and consultation- the role of a bank lawyer is expansive.
Banks also increasingly engage in cross border transactions with different clients. The knowledge of international taxation and other nuances are necessary for the banks or financial institutes to operate optimally.
You can find employment in both Indian and foreign banks like ICICI, HDFC, Standard Chartered, SBI, Barclays, Goldman Sachs, JP Morgan. The foreign banks are perfect for the transfer pricing lawyers where they can develop their expertise with a good exposure to international transactions.
Financial institutions like LIC Housing Finance Ltd., Aditya Birla Finance Ltd., can also be good employers. You can start your career as a legal executive and then progress to Legal Counsel, Head Legal and then to Director Legal. The CTC of a Director Legal is a minimum of around 80 lakhs per annum with other additional benefits.
The various tech driven digital currency companies like Paytm, Paypal and PayU also hire lawyers related to financial services.
The Road to Career Success for Professionals
Getting a specialization in transfer pricing is not just profitable to students. Even professionals can take up the course to reach a new height in their career. It is useful to various stakeholders of business and can leverage your potential in a significant way!
- Entrepreneurs can get a complete understanding of the transfer pricing regulations enabling them to run their businesses effectively.
- Accountants and Chartered Accountants will be able to work on projects which require understanding of transfer pricing and international taxation. This will expand their role and can lead to promotions.
- The tax implications of global transactions will be clear to tax lawyers and they can effectively sign up with international clients.
- It is also an ingredient of success for intellectual property or corporate lawyers who can get increased remuneration for their new skill.
What Can You Expect to Be Paid?
If you are just starting out, expect to be paid anything from 5 to 12 lakh per annum. An experience of around 10 years could have your CTC rising up to 26 LPA.
Apart from the base salary, you would get allowances for your car and other rentals, as well as a bonus – which really varies according to the terms you’ve been set.
Many are given stock options as well, especially if you have been working for a few years, and healthcare for you and your family.
The various job portals like Naukri, Shine and Timesjob have hundreds of jobs listed under the transfer pricing category. You can join as international tax head, senior managers, financial executives, Senior coordinators and in other roles in well known companies.
It is the reason so many people are choosing a specialisation in transfer pricing. Surely it is going to be one of the main employers in the near future.
Data Source: PwC Study on Transfer Pricing
Here is what we are offering
We have a Certificate Course on offer covering all the avenues raised above. It is specifically designed for young law students, CA, CS, lawyers, management consultants, businessmen, entrepreneurs, and professionals from all other domains.
The certificate is awarded by NUJS, Kolkata, a leading National Law School, and it will have the course name as “Certification in Transfer Pricing Laws”.
You may also schedule a consultation call with a Legal Education Counsellor. To do that, please call: 011-3313-8901
What will you learn in this course?
- How to apply advance tax planning strategies to a unique cross-border structured financial product.
- How tax haven countries can help you mitigate your tax liability
- How to interpret tax-treaties.
- How you can resolve disputes effectively in the field of international taxation.
- How to identify and resolve tax controversy issues at the time of structuring a transaction.
- How you can claim benefits under DTAA.
How can you use this skillset?
Understanding of international taxation and transfer pricing can be useful in the following ways in one’s professional/academic career.
Create strategies on the structuring of cross-border transactions to reduce your overall tax bill. Expand your practice in International Taxation domain. Advise businesses on how related-party entities should carry business in accordance with the transfer pricing rules. Learn how to negotiate and draft advance pricing agreements.
Other features of the course
- Learn anytime and from any location – 24 x 7 access available on mobile and tablet devices (Android) and on web.
- Faculty includes experts from the most reputed corporate law firms. Get doubts cleared in 24 hours.
- Learning materials comprise of video discussions with experts, animation, study materials, checklists. Access sample agreements and approval applications.
- Get doubts cleared within 24 hours over a discussion forum.
- Those who complete the course successfully will receive certification from NUJS, Kolkata – certification will be based on performance in an online test.