Gregory Husisian Highlights How Multinationals Can Navigate Regulatory Demands
Foley & Lardner LLP partner Gregory Husisian highlighted how multinational companies can navigate varying regulatory demands in the Law360 article, “Multinationals Grapple With Tariff-Induced Pricing Issues.”
Husisian explained that transfer pricing issues can often span across tax and trade jurisdictions, which can result in imports being unaware that they must produce separate transfer pricing analyses for matters before the Internal Revenue Service and U.S. Customs and Border Protection.
“The two agencies use different principles to establish what is an arm’s length price,” he continued. “As a general matter, however, the IRS is concerned that purchases from foreign affiliates might be too high, which would lower U.S. taxable income, while Customs is concerned that entries might be priced too low, which would lower the entered value, and hence the amount of tariffs due.”
He emphasized that producing transfer pricing studies “for both agencies is more important than ever” since the Trump administration’s tariffs have taken hold and how Foley facilitates these separate analyses for clients using “bridge memos” that can help apply the IRS transfer pricing study to a trade context.
“This results in a low-cost way for clients to leverage their IRS transfer price studies to meet Customs requirements without starting over from scratch, thereby meeting the requirements of both agencies,” he noted.
Husisian added that importers need to focus on what they can control, including fine tuning supply chains, complying with Customs rules, and considering legal strategies that can reduce tariff burden.
“There are a wide variety of ways that importers can protect themselves from tariff increases, including changing who the importer of record is, changing who is responsible for tariffs and coming up with arrangements behind the scenes to shift or share tariffs,” he added.
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