Welcome To the Tax Intelligence Report!

The March 2010 issuse of The Tax Intelligence Report profiles the tax career of Kathrine Kimball, VP of Ballentine Barbera Group, a Charles River Associates company headquartered in Boston, Massachusetts. Kathrine Kimball operates out of the San Diego, CA office for CRA where she provides her expertise in transfer pricing with extensive experience in both international and domestic transfer pricing, encompassing documentation, planning and controversy defense as well as supply-chain based tax planning.
When you encounter a remarkable tax professional like Kathrine Kimball, you appreciate her deep knowledge and understanding of transfer pricing. Kathrine came to my attention when someone at the International Tax Review revealed to me her outstanding reputation and uncompromising integrity as a transfer pricing expert. Kathrine Kimball has a reputation for doing things right!


All the best,

Kathleen Jennings
Editor, The Tax Intelligence Report
President
ET Search, Inc.
Kathleen@etsearch.com
www.etsearch.com
Social Networking Email Address:
KathleenKittyJennings@etsearch.com

Kathrine Kimball is VP at Ballentine, Barbera Group, a Charles River Company where she brings her domestic and international transfer pricing knowledge to major multinationals around the world. Prior to Charles River Associates, she was a Tax Partner with Ernst & Young, in San Francisco, CA where she was responsible for building the Global Transfer Pricing and Tax Effective Supply Chain Management Practice. The group was awarded the International Tax Review Best Transfer Pricing Practice in North America under her tenure. She was founding Practice Leader of the Global Transfer Pricing Group as well as the United States Transfer Pricing Desk in Belgium. She earned her MBA from the College of William and Mary in Williamsburg, Virginia; and she earned her BBA at Loyola Marymount University in Los Angeles, California.

KJ- How has the current economic climate impacted multinational corporations transfer pricing policy?

KK- A multinational’s global transfer pricing policy must be routinely reviewed, particularly in light of the current economic conditions, to ensure that the risks have been properly mitigated and that opportunities have not been overlooked. The risks may be found in the changes in the financial foundation or in the assumptions made surrounding the business model. Worthwhile planning opportunities will be found in the balance of the “art and science” of transfer pricing.

KJ- Why is your work different than the services provided by the international public accounting firms and law firms?

KK- We provide a fresh and independent perspective that is not obliged to other facets of the tax or audit team, which is why we are frequently involved upfront to assess controversy risk. To do so, it is important to review the historical reports and work through the details to understand the context in which they were written and contrast that baseline to how the company operates today. Quite often, we find that there is indeed more to the story and that many changes to the company have occurred since the original report was prepared, rendering the current methods, assumptions, and/or conclusions questionable.

KJ- Can you provide us an example of what things may have changed?

KK- Changes to external relationships are easily overlooked, particularly during this recession, such as the sales and financing terms of an external comparable, or perhaps the business unit structure has consolidated, potentially impacting the tested party data. The relevant question companies need to ask themselves is whether their organization mirrored the changes in their intercompany transactions that have occurred in third party relationships or in organizational changes. Business is moving fast in 2010 and the transfer pricing needs to stay in sync.

KJ- What is happening right now that companies need to be aware of regarding their transfer pricing policy?

KK- Companies need to closely reevaluate how they have been booking their intercompany transactions and ultimately documenting their transfer pricing policy. This is the time to get “back-to-basics” by pressure testing the foundation of their transfer pricing to ensure it is defendable. The methods of the past may no longer be relevant and they may be creating questionable results unnecessarily. This proactive approach to defense calls for a fresh, independent look, which is precisely what the Charles River group is poised to do.

KJ- What countries should we be paying attention to right now? What countries are being most aggressive in their transfer pricing policies?

KK- There are two opposing examples that are both threats in their own right: China is now a viable threat, based upon a ramp-up in experienced resources hired from the Big Four, coupled with new transfer pricing rules, and a wide net being cast for transfer pricing audits. This is a direct contrast to the more targeted approach in the UK by HMRC, which is in part necessitated by the comparatively fewer resources. HRMC continues to be emboldened, however, by recent wins in the DSG Retail Limited case last year and the recent pre-court settlement for the Astra Zeneca case, both of which are in the magnitude of hundreds of millions of pounds. The onus is squarely on the UK taxpayers to understand and appropriately document the economic issues within their transfer pricing more precisely than ever before.
Having said that, the Canada Revenue Agency continues to be one of the most aggressive tax authorities for my clients to deal with, particularly companies with royalties and total system losses. It is always at the top of the risk profile assessment along with certain domestic US jurisdictions, such as New York. The Internal Revenue Service has also added to the more senior ranks of transfer pricing expertise this past year, which is another indicator of enhanced risk on the horizon.

KJ- How can multinationals protect themselves from the impending aggressive moves on their transfer pricing policies?

KK- I believe there are so many companies who are quick to take simple, “cookie-cutter” studies and apply them year in and year out without questioning the relevancy to their business operations in real-time. Businesses may change gradually each year, equating to a meaningful change over the course of a few years that has gone unnoticed, or they may have changed radically in a single tax year. Some level of meaningful, annual fact-finding should be an absolute minimum; it is also a great way for tax directors to keep the pulse on other changes in the business that affect their tax positions.

KJ- Why did you move to Charles River Associates from your outstanding career in a Big Four transfer pricing practice? In fact, I heard your group won the International Tax Review award for the best transfer pricing practice.

KK- I definitely worked with many wonderful transfer pricing professionals around the globe during my 15 years in a Big Four; one compelling reason for me to join Charles River Associates was to be able to serve my transfer pricing clients independent of the broader audit and tax teams and to extend my transfer pricing toolkit in to other areas of valuation and economic consulting. CRA is a leading global consulting firm that offers economic, financial and business management expertise to major law firms, industries, accounting firms and governments around the world. Given our legacy of the Ballentine/Barbera Group, we have been able to attract the cream-of-the-crop transfer pricing professionals to the organization. I am thrilled to be a member of CRA’s fast-growing transfer pricing practice; in fact, we are now the largest transfer pricing practice outside the Big Four, which is very exciting for me to have the opportunity to contribute in a meaningful way to build another practice on a global platform..

KJ- Kathrine, thank you for taking the time to answer our questions. Your perspective is valuable to the Tax Intelligence Report readers and we appreciate the time you gave to share your experience with our readers this month.

Kathleen Jennings (KJ)
Editor, The Tax Intelligence Report
Kathleen@etsearch.com
www.etsearch.com

Kathrine Kimball
Vice President, Charles River Associates
KKimball@crai.com
www.crai.com

Our Tax Recruiters | Current Tax Executive Searches | Our Tax Recruiting Clients | Speakers Bureau | Contact Our Tax Recruiters