My book: Transfer Pricing in Action

Transfer Pricing in Action

This is my new book, written in the “business novel” tradition, with my colleague, Althea Azeff, with whom I often team for competitive bids and tax pursuits. The book is an extended case study of MSell corporation. The name MSell probably comes from “import sales.”  Karen Wu is the founder of MSell. According to the book:

MSell Corporation was born in the mid 1980s from Ms. Wu’s leveraging of her extensive business contacts with small manufacturing companies in China, cultivated through a number of stints in various procurement departments of major retailers. Using those contacts, she had ordered personal accessories, simple gadgets, and everyday convenience items, all manufactured to her exacting specifications. On her quarterly tours of various knick-knack manufacturers in China, she would discuss her ideas for trendy, fashionable men’s accessories and order her hand-chosen manufacturers to create samples and technical details that brought her ideas to life.

At first MSell just imported products manufactured its own specifications by unrelated Chinese vendors and sold them at wholesale to department stores and other retailers.  Throughout the book we first see MSell raising capital to go into retail sales, expand into Canada, expand into Europe, set up its own permanent sourcing and design house in China with Karen Wu moving there, rebrand itself as Epsilon, and turn its China operations into a global marketing and supply hub for its business.

We have included some excerpts and introduction to five thematic areas covered in the book:

Controversy,

Risk-Return Tradeoff,

Intangibles,

Sourcing, and

Principal Operating Company Structures

Here is the publishers note on it:

Business tax strategy is at its most challenging when success ushers in the promise of major growth. At this ‘moment of truth’ the thorny special issues associated with international expansion loom over the fate of the company. These issues can be summarized in two words: transfer pricing. In this extended hypothetical case history, presented in narrative style with an abundance of graphic material, the authors lay bare the minutest details of transfer pricing planning and how the process engages and affects the ambitions, insights, and interactions of the group of business people and advisors involved. Because of this exposure to decision making and consulting dynamics, the reader gets a taste of the trade-off between ‘correctness’ and ‘practicality.’ In fact, a more practical approach to the subject is hard to imagine. The book’s format, innovative in every way, finds plenty of room to define every term, cite every source, and describe every opportunity or pitfall affecting the tax aspects of such processes as moving into new jurisdictions, restructuring operations to create regional or global centres of excellence, or changing supply chains. Scores of information-packed tables, graphs, flowcharts, and other illustrations – often in the form of slide presentation screens or ‘real-world boxes’ – enhance the in-depth discussion of such aspects of international tax planning as the following (among much else):

  • choice of tax status;
  • investors and control;
  • licensing and intellectual property issues;
  • accounting methods;
  • recruiting foreign personnel; and
  • tax audits by revenue authorities.

In a business environment where transfer pricing has emerged as the most dynamic area of international taxation, following extensive legislative activity and rulemaking, this remarkable book bridges the abstract theory of transfer pricing and its everyday practice in a very accessible way. No other book on the subject is so practical or so down to earth. Lawyers and other professionals in international taxation and tax law will find it enormously appealing, informative, and useful.