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EY Global Oil and Gas Transfer Pricing Services
EY Global Oil and Gas Transfer Pricing Services
Helping the world’s leading oil and gas companies succeedThe oil and gas industry is going through a period of fundamental change. In addition to geopolitical uncertainty and extreme oil price volatility, companies are facing unprecedented scrutiny from taxing authorities. Governments worldwide and supranational organizations are cooperating more than ever to share information about multinational corporations. In this environment, companies need globally consistent and transparent transfer pricing (TP) methodologies and systems to mitigate the elevated tax audit risks and avoid double taxation in countries where no treaty protection exists. These methodologies and systems will also help drive efficiencies and reduce costs across the value chain while bringing more clarity to strategic planning.
The global nature of the oil and gas business means there is a constant flow of products, intangibles, services and financial instruments moving across borders and business units. With the increased regulatory scrutiny, companies are now required to deliver detailed TP analysis and documentation for each of these items, which can be both time-consuming and complex.
EY’s global Transfer Pricing group is a network of more than 2,300 professionals in 125 countries, with over 20 years of experience providing a broad variety of services to the oil and gas industry. Our professionals are helping companies traverse the web of country tax laws, regulations, rulings, methods and requirements to develop a complete TP system, allowing companies to reduce risk and cost and be more efficient in the market.
More than 40% of our TP professionals are regularly mentioned in Euromoney’s annual Guide to the World’s Leading Transfer Pricing Advisers.
EY Global Oil and Gas Transfer Pricing Services
Our successfully completed projects include the development and delivery of TP business processes, drafting internal regulations and training companies’ employees. We help our extended network of clients develop complex methodologies for analyzing controlled transactions, taking into account both industry specifics and transaction circumstances. Our proven methodologies also help support clients’ internal TP policies.
EY is known worldwide for our insightful advice and the depth of our industry experience. Our professionals have prepared TP documentation in over 75 countries for major and independent oil companies, service companies, equipment companies and drillers. Our work includes extensive experience completing APAs and assisting companies with competent authority fillings globally.
TP processes can and should be automated to improve efficiency and reduce risk. Our many projects in this area include a recent diagnosis of accounting systems and the provision of automated deliverables for completing notifications of controlled transactions. We’re working with some of the industry’s largest companies to
implement larger-scale projects to automate TP documentation preparation processes.
Another recent project included structuring a supply chain across several major oil and gas market players, during which we provided advice on commercial pricing and analyzed profit distribution options, keeping in mind the players’ interests, regulatory restrictions and applicable tax control rules. The project included the development of a financial model with more than 60 pricing scenarios and an analysis of various market indicators in order to set and justify transaction prices.
The oil and gas industry today is in the midst of a permanent transition to new international tax rules and a higher level of scrutiny. The right TP methodologies and systems can do more than just help companies cope. They can help them achieve greater efficiency, risk management and planning capabilities. EY’s Transfer Pricing group is helping the world’s leading oil and gas companies achieve these objectives every day.
We perform the following services in the oil and gas industry, to address the application of TP regulations and related matters:
Tax effective supply chains
• Structure tax effective supply chains and analyze commercial pricing approaches, including the identification of profit centers and routine functions
TP methodology development and documentation
• Conduct economic research and prepare documentation to support prices used in various types of intercompany transactions
• Adjust the existing documentation to TP regulations effective in jurisdictions where transaction parties are located, and review the documentation prepared by corporate clients for relevance and compliance with regulations
Financial analysis and allocation of costs
• Develop a methodology for allocating costs from controlled transactions using economically justified allocation keys
• Calculate the actual profitability of controlled transactions, including by means of automation tools developed by EY
Transparent, effective business processes for efficient TP functions
• Analyze how a client’s business units cooperate in setting and monitoring prices in intercompany transactions; develop internal TP regulations and policies
Effective IT systems
• Automate the processes used to complete notifications of controlled transactions in the current accounting system or through an external IT program
• Automate the document generation process
• Automate the allocation of costs and calculation of actual profitability of controlled transactions
Tax controversy and tax audit support
• Provide support in the course of TP audits, including tax control activities and a review of tax audit materials and objections
• Represent taxpayer interests in litigation
• Assist clients in exercising their right to symmetrical adjustments
Advance pricing agreements (APAs) and competent authority (CA) negotiations
• Assisted companies with the negotiation of APAs and CAs with the taxing authorities in Australia, Argentina, Canada, Germany, India, Indonesia, Kazakhstan, Malaysia, Mexico, Norway, Russia, Singapore, UK and the US
International tax compliance and disclosures
• Analyze the compliance of company transactions with global TP policies and requirements, including the latest Organization for Economic Cooperation and Development initiative on Base Erosion and Profit Shifting (BEPS); identify risks and advise on risk management matters
• Diagnose a company’s internal business processes and accounting systems in view of increasing disclosure requirements at both the country and global level
Our services
EY | Assurance | Tax | Transactions | AdvisoryAbout EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
How EY’s Global Oil & Gas Sector can help your business
The oil and gas sector is constantly changing. Increasingly uncertain energy policies, geopolitical complexities, cost management and climate change all present significant challenges. EY’s Global Oil & Gas Sector supports a global network of more than 10,000 oil and gas professionals with extensive experience in providing assurance, tax, transaction and advisory services across the upstream, midstream, downstream and oil field subsectors. The Sector team works to anticipate market trends, execute the mobility of our global resources and articulate points of view on relevant sector issues. With our deep sector focus, we can help your organization drive down costs and compete more effectively.
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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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ContactsPurvez F. Captain, PhDEY Global Oil and Gas Transfer Pricing LeaderTel: +1 713 750 [email protected]
Evgenia VeterEMEIA Oil and Gas Leader, and CIS Transfer Pricingand Operating Model Effectiveness LeaderTel: +7 495 660 [email protected]
Mark CampAmericas Oil and Gas Transfer Pricing LeaderTel: +1 713 750 [email protected]
Joe LawsonAsia-Pacific Oil and Gas Transfer Pricing LeaderTel: +61 8 9429 [email protected]
Ichiro SutoJapan Oil and Gas Transfer Pricing LeaderTel: +81 3 3506 [email protected]
Alexey KondrashovEY Global Oil & Gas Tax LeaderTel: +971 56 [email protected]
Other EY TP thought leadership:
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For nearly 20 years, our Global Transfer Pricing Survey has served as a standard for indicating major trends in the global market and client needs.
The EY Worldwide Transfer Pricing Reference Guide is a tool designed to quickly identify the TP rules, practices and approaches adopted by more than 110 jurisdictions.