I would like to summarize about the below information.

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Welcome to EY's 2016 Transfer Pricing Survey Series, where we collect and analyze input from taxpayers on what they are seeing in practice in a variety of aspects across the transfer pricing life cycle.

This survey of 623 transfer pricing executives in 36 jurisdictions across 17 industries finds that respondents are encountering significantly more transfer pricing disputes in more jurisdictions than in the past. And, perhaps more significantly for the months and years to come, respondents are anticipating an expanding swath of conflict spanning a wider range of geographies across a broader range of issues.

Survey highlights

In essence, transfer pricing is like string art, where colored thread pulled taut connects pins to form geometric shapes. Each connection is critical to crafting the final image. Over time, these patterns can become more elaborate and complicated, but in the end, should form a working system. The network depends ultimately on the integrity of the string remaining taut. Snip anywhere, and the entire picture can unravel.

Of course, art, like transfer pricing, can be a matter of interpretation. Where one person sees beauty, another feels indifference or, worse, takes offense. Our 2016 survey indicates that transfer pricing has entered an era of heightened tax risk and controversy, driven by an exponential increase in the demand for tax-related transparency.

In response to heightened calls from activists and collection agencies, tax rules are being designed and implemented in a more comprehensive manner the world over. This is forcing companies to share significantly more details regarding their operating data and tax strategies, both publicly and in materials available to tax authorities.

This further aligns with BEPS outputs and messages from the United Nations, both of which intensify the spotlight on the local activities of multinational groups.

At the same time, the more companies have to disclose, the more they will find themselves examined, and possibly misunderstood, by both tax activist pressures and tax collectors using deeper insight to demand more income. The questions become:

What changes are taking place in the tax risk landscape, and where are the instances of controversy becoming more prominent?

What rules are being written to alter the mix in transparency and compliance, and how are they being interpreted?

What proactive operational steps are needed for companies to stay ahead of today's transfer pricing realities?

The global tax avoidance debate

The fact that transfer pricing has become one of the most visible and controversial topics in the global tax avoidance debate has contributed to the new risk aversion. In recent years, transfer pricing has attracted the attention of the news media, politicians and social justice groups that suspect multinational corporations use transfer pricing to pay less than a "fair share" of tax.

Largely as a product of this heightened visibility, tax authorities are under pressure to implement greater and unprecedented demands for transparency about multinationals' operations, tax profiles and effective tax rates, and show tangible outcomes from this.

As of October 2016, 44 countries have implemented all or some of the BEPS recommendations, creating the potential for some conflicting interpretations. In all, more than 80 countries globally are committed to implementation. This compels more disclosure about a business's transfer pricing activities in the aggregate, and how this aligns to the operating model.

But it also necessitates a shift from a reactive stance to a proactive review of policies, procedures and operations so that any inevitable disclosures contain nothing untoward. Companies today must increasingly demonstrate that they are following not only the letter but also the spirit of the tax and transfer pricing rules as should any responsible corporate citizen.

Align your transfer pricing model with your operating model

Unquestionably, companies will need to become comfortable with sharing more tax data with authorities far and wide. More jurisdictions having unfettered access to more data will lead to heightened focus on transfer pricing and greater risk of controversy.

Recognize also that in this era of increased transparency, reputational risk is increasingly at stake. Companies might even want to consider sharing more, not less, tax information. To the extent an enterprise can do more thorough job in educating the public and other stakeholders about the contributions made via tax, it may be able to turn a potential negative into a strong positive.

In today's global economy, any company that uses pins and thread to visually depict its transfer pricing operations would end up with a colorful picture. But the craft is under increasing pressure it is important to check the connections to be sure the thread is not fraying. Because in the future, there's going to be more scrutiny than ever of how your transfer pricing model aligns with your operating model.