Transfer Pricing Is Becoming an Operational Challenge

Several years ago, transfer pricing conversations tended to follow a predictable pattern.

The discussion would focus on policy design, benchmarking studies, documentation requirements and filing deadlines. The underlying assumption was that if the policy was technically sound and the documentation was complete, the organisation was largely protected.

Increasingly, that assumption no longer holds.

During a recent fluid Talk webinar hosted by fluid and Graphene Economics, one theme surfaced repeatedly from practitioners working across multinational groups and revenue authorities: transfer pricing disputes are becoming less about the policy itself and more about an organisation’s ability to explain, evidence and operationalise it.

What was once viewed primarily as a compliance process is rapidly becoming an operational challenge.

Transfer Pricing as an Indicator of Organisational Maturity

Transfer pricing is often discussed as a specialist tax discipline. Yet one of the strongest themes to emerge from the webinar was that it is increasingly becoming a proxy for something much larger.

Revenue authorities are no longer assessing transfer pricing policies in isolation. They are increasingly evaluating the operational systems, governance structures, data controls and organisational processes that sit behind them.

What was once viewed as a compliance requirement is rapidly becoming an indicator of organisational maturity.

According to Chris Cochrane, founder and CEO of fluid, several forces are driving this change simultaneously.

“The environment has changed. This isn’t just business as usual. Governments are under pressure to raise revenue. Revenue authorities are becoming more technically capable. Information sharing between authorities is increasing, and technology is moving incredibly fast. All of this lands on the desk of the transfer pricing manager.”

Michael Hewson, founder and director of Graphene Economics, believes the shift is structural rather than temporary.

“Before Covid, engagements with revenue authorities generally happened in person. Now our team regularly engages with revenue authorities virtually across multiple African countries. But alongside that change has come a lot more information, a lot more expectation and much greater pressure on transfer pricing teams.”

The consequence is that transfer pricing increasingly extends beyond the tax department. Questions that were once confined to technical tax specialists now reach finance teams, operational leaders, technology stakeholders and executive management.

Revenue authorities are increasingly interested not only in what a transfer pricing policy says, but also in how it operates in practice.

These are no longer merely compliance questions. They are operational questions.

As a result, transfer pricing is becoming less about producing reports and more about creating operational visibility.

The Shift from Compliance to Data Confidence

Perhaps the clearest theme emerging from the discussion was the growing importance of confidence in underlying data.

“There has been a shift away from compliance and ensuring documents and returns are merely submitted on time. The focus now is on the underlying data. How do you collate it, interpret it and provide it quickly and consistently to both the business and revenue authorities?”

That shift has significant implications.

Historically, organisations focused on ensuring that documentation was completed correctly. Today, they must also ensure that the underlying information can withstand scrutiny.

The challenge is not necessarily that organisations lack data. In many cases, they have more data than ever before.

The challenge is being able to locate it, validate it, reconcile it and reproduce it consistently when questions arise.

Different entities maintain different records. Finance systems evolve. Reporting structures change. Historical information becomes fragmented across spreadsheets, shared drives and archived systems.

The result is that organisations often spend considerable effort locating, validating and reconciling information that should already be available.

As regulatory scrutiny increases, that effort becomes increasingly difficult to sustain.

Why Evidence Is Becoming the New Battleground

A recurring topic throughout the webinar was the growing importance of evidence.

Documentation explains a position.
Evidence proves it.

The distinction is becoming increasingly important.

A transfer pricing policy may have been developed years ago. The people who supported it may have moved on. Systems may have changed. Business structures may have evolved. Shared drives may have been reorganised several times.

The audit request still arrives.

And increasingly, it arrives with expectations that go far beyond traditional documentation.

Nicholson described a transfer pricing audit involving eleven separate information requests spanning five financial periods. The complexity was not driven by transfer pricing policy. It was driven by the challenge of producing consistent supporting information across multiple years.

“Teams change, systems change, shared drives move. Now you’re trying to retrieve invoices, emails, general ledger records and KPIs from seven years ago, while ensuring that everything submitted in request one still aligns with request eleven.”

As audits become more extensive and increasingly continuous, organisations are discovering that evidence management is becoming a strategic capability in its own right.

The organisations that can quickly produce reliable supporting information often find themselves in a significantly stronger position than those that cannot.

Transfer Pricing Audits in the Age of AI

Artificial intelligence is beginning to reshape transfer pricing from both sides of the table.

Many organisations are exploring how AI can help automate data collection, validation and analysis. At the same time, revenue authorities are beginning to leverage AI to accelerate their own review processes.

“Companies have been submitting transfer pricing documentation years before tools like ChatGPT existed. But revenue authorities in 2026 can now upload transfer pricing documentation, financial statements and integrated reports into AI-enabled systems and ask for summaries of transfer pricing risks.”

This creates a fundamentally different environment.

Information that previously required weeks of manual review can now be analysed in hours. Disclosures can be compared across multiple documents. Potential inconsistencies can be surfaced far more quickly.

In one example discussed during the webinar, a discrepancy between related-party disclosures in financial statements and figures disclosed in a tax return triggered concerns that extended well beyond transfer pricing itself.

“The underlying transfer pricing values were correct. But the related-party note in the financial statements had not been finalised correctly. Suddenly the discussion was no longer about transfer pricing. It became about credibility.”

The lesson is clear.

As AI improves the ability to identify inconsistencies, organisations will need greater consistency across all sources of information.

The webinar also highlighted how disputes are becoming increasingly routine across Africa.

“In one case, as we were wrapping up one audit cycle, the next audit notification arrived almost immediately afterwards. For many multinationals, audits are no longer occasional events. They’re becoming continuous.”

The Emergence of the Transfer Pricing Operating Model

Historically, transfer pricing was often managed as a year-end activity.

The panel argued that this approach is increasingly unsuited to today’s environment.

Instead, organisations are beginning to adopt a more proactive operating model centred around four capabilities.

The first is governance and policy stewardship, ensuring clear ownership, accountability and oversight of transfer pricing activities.

The second is data foundation and traceability, creating confidence that information can be sourced, validated and explained.

The third is monitoring and analytics, providing visibility into emerging risks and exceptions before they become problems.

The fourth is evidence and audit readiness, ensuring that supporting information is continuously accumulated rather than assembled under pressure.

Together, these capabilities create a framework for managing transfer pricing continuously rather than retrospectively.

“We need to move from a reactive model to one where companies anticipate audits rather than simply respond to them. It’s about understanding what’s happening in the current year, not just documenting the previous one.”

Building Real-Time Transfer Pricing Capability

The organisations most likely to succeed in this environment are unlikely to be those with the largest transfer pricing teams.

They will be the organisations capable of creating operational clarity.

That means understanding where data originates, how it moves through the business, who owns it and how it supports the organisation’s transfer pricing position.

It means creating processes that generate evidence continuously rather than reconstructing it under pressure.

It means creating visibility across governance, data, monitoring and assurance activities throughout the year.

And it means recognising that transfer pricing increasingly reflects broader organisational capability.

As Cochrane concluded:

“Transfer pricing is no longer something that can sit in a year-end documentation process. The pressure is now operational.”

Transfer Pricing Ops Model Accelerator

For organisations looking to assess and strengthen their transfer pricing operating model, fluid and Graphene Economics have developed the Transfer Pricing Ops Model Accelerator.

The Accelerator is designed to help organisations evaluate how transfer pricing works in practice across governance, data collection, validation, documentation, monitoring and audit readiness. Participants receive a structured assessment of their current operating model, practical recommendations for improvement and a roadmap for creating a more controlled, traceable and automation-ready transfer pricing process.

The workshop examines ownership, process maturity, data requirements, control gaps and automation opportunities. It is designed to help organisations strengthen transfer pricing operations while improving visibility, consistency and confidence in the underlying data. It also identifies opportunities for workflow automation, AI-assisted validation and stronger audit readiness.

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Related Resources

Explore additional transfer pricing, CFC, Pillar Two and global tax resources at:

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