Transfer pricing (TP) adjustments are often viewed primarily through a U.S. income tax lens, but they can also have significant implications for value-added tax (VAT) reporting. Multinational companies making year-end TP true-ups (i.e., adjusting controlled transactions to reflect prices actually charged) may unknowingly trigger VAT obligations in jurisdictions where transactions involve cross-border goods or services. Determining whether an adjustment qualifies as a new transaction for VAT purposes—or is simply a retrospective accounting exercise—requires careful analysis. The intersection of transfer pricing and VAT is complex and evolving, and businesses must stay proactive to avoid unintended compliance risks or audit exposure.

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