Transfer Pricing in a Post-COVID World: Balancing Compliance with New Global Tax Regimes

Abstract

The COVID-19 pandemic disrupted global economies, challenging multinational corporations to navigate complex transfer pricing regulations while balancing compliance with rapidly evolving tax regimes. As supply chains were restructured, profit margins recalibrated, and operational models adapted to new realities, traditional transfer pricing methodologies faced increased scrutiny from tax authorities worldwide. The pandemic accelerated discussions on equitable profit allocation, particularly for digital economy businesses, while new global frameworks such as the OECD’s Unified Approach gained momentum. Multinationals now face heightened risks of disputes as governments grapple with revenue shortfalls and intensify enforcement. In this environment, transfer pricing strategies must evolve beyond compliance to incorporate robust documentation, real-time data analytics, and proactive stakeholder communication. Companies must reassess intercompany transactions, pricing of intangibles, and the arm’s length principle within the context of pandemic-induced disruptions, such as market volatility and altered supply-demand dynamics. This paper explores how organizations can balance meeting compliance obligations and adapting to new global tax regimes. It highlights the importance of integrating risk management frameworks, leveraging advanced technology for tax reporting, and fostering collaboration with tax authorities to minimize disputes. Additionally, it examines case studies of industries most affected by the pandemic—such as pharmaceuticals and technology—to illustrate practical approaches for managing transfer pricing in a post-COVID world. By adopting a forward-looking, flexible approach, businesses can ensure compliance and build resilience in the face of ongoing regulatory changes and economic uncertainty.