Spring 2015 issue of Horizons

Your ability to collect accounts receivable in a timely manner, and with minimal withholding taxes, affects your company’s cash flow.

Transfer pricing rules follow the arm’s length principle, meaning transactions between two related entities should have similar terms and conditions as the same transaction between two unrelated entities. When dealing with transfer pricing, you should set up an intercompany agreement to ensure uniformity in treatment of transactions. Having a detailed document that specifies your policies and procedures can help prevent future potential controversies, avoiding wasted time and resources. Additionally, formal documentation is required in many jurisdictions and will be important in others if intercompany transactions come under scrutiny of tax authorities.

Below are questions to ask as you move toward global expansion:

∙ How will payments be collected?

∙ What is common practice in this market?

∙ What currency should the invoice be in?

∙ What payment terms are typical?

∙ Should bad debts and currency gains/ losses be deducted in the U.S. or local country? We encourage you to contact your RubinBrown advisor before and during an international expansion so we can actively work with you to achieve your business objectives in a tax-efficient manner.

Accounts Receivable When doing business in other countries, it is important to think about how you will be collecting your receivables.

RubinBrown’s Construction Services Group We provide services to general contractors, specialty subcontractors and related companies in the construction industry.

Frank Hogg, CPA — St. Louis Partner-In-Charge Construction Services Group 314.290.3413 frank.hogg@rubinbrown.com

Michael Fox — Kansas City Manager Construction Services Group 913.499.4434 michael.fox@rubinbrown.com

Ken Van Bree, CPA — St. Louis Partner & Vice Chair Construction Services Group 314.290.3429 ken.van.bree@rubinbrown.com

Kirk Wonio, CPA — St. Louis Manager Construction Services Group 314.290.3335 kirk.wonio@rubinbrown.com

Matt Beerbower, CPA — Denver Partner Construction Services Group 303.952.1252 matt.beerbower@rubinbrown.com

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