Joanna Gniadecka, Head of Transfer Pricing at ArcelorMittal shares her Transfer Pricing insights in our latest 30 Second interview.
What are you currently spending most of your time on?
Recently the biggest focus was given on preparation to the C-b-C reporting and new documentation requirements. But as always updating and adapting the transfer pricing policies, and dealing with the transfer pricing audits take their fair share of attention too.
What is the biggest challenge facing Transfer Pricing executives in your particular industry at the moment?
In such a fast pace tax environment the most difficult aspect is to “translate” the BEPS changes and their impact to other Group executives. Dealing with the growing uncertainty requires, from all the executives, a change of mind-set when it comes to tax and transfer pricing.
What should a successful post-BEPS transfer pricing strategy look like?
I wouldn’t dare to say that something like 100% “successful post-BEPS strategy” is possible at all, as we simply do not know yet what the post-BEPS practice will look like. What is needed is strong preparation to new documentation requirements, and reviewing existing transfer pricing policies.
Arm’s length or formulary apportionment?
My feeling is that the end of arm’s length principle announced at the beginning of the BEPS project was quite premature. What we see now is strong ALP with some element of formulary apportionment being introduced by the back door. Whatever the evolution of these two, as transfer pricing expert I have always one basic principle in mind: how would an independent party behave?
Which areas of TP do you think the next wave of transfer pricing controversy will come from?
If I need to pick one specific topic I believe will be particularly in the focus, it will be a profit split method. Applying profit split looks like an unavoidable consequence of an after-BEPS environment. But, especially for complex MNEs with vertically organised supply chains, it will bring many difficulties in practice.
Which jurisdictions are likely to be keeping the Head of TP awake at night?
Traditionally, Brazil proves to be a challenging country from transfer pricing perspective and nothing shows that it may change any time soon. What is interesting is that in Europe, along with other typically “difficult” jurisdictions like Italy, Greece or Spain, I have observed during last months some kind of “awaking” in East European countries where transfer pricing audits have started to become a rising issue.
What advice would you give an aspiring TP professional?
Keep on going! Transfer pricing is the great area of development and the next few years will bring many new, fascinating changes. To keep on top of it the best practice is to learn, learn and learn as much as possible and don’t close yourself off in to one area of expertise, industry or topic.
You’re attending and speaking at IBC’s TP Minds 2016 in March, in London. What are you most looking forward to?
Such events are a great opportunity to exchange the ideas and meet new people. I am looking forward to it!
Tell us a little known fact about yourself.
I promised my family that this year I will finally try skydiving! Fingers crossed!
Joanna Gniadecka will be discussing how to successfully managing TP Audits at TP Minds International 2016. You can find out more about the conference here.