In an
increasingly global marketplace, the taxation aspects of cross-border
trading and international inter-company pricing agreements are becoming
every more important. If a business structures its tax liabilities
correctly it can save significant amounts of money. But if it gets the
process wrong it can find itself facing massive back tax and penalty
payments.
Because of this major
accounting firms, legal practices and specialist consultancies are all
devoting substantial resources to the attraction and development of
professionals who can help their clients win rather than lose in this
complex and challenging area. But who exactly are these people, what do
they do and what are your chances of joining their select company?
Despite
an acute need for their services, transfer pricing specialists are
decidedly thin on the ground. In fact it has recently been estimated
that there are currently less than 12,500 professional staff working in
this area around the world. Many of them are employed by the ‘Big 4’,
others by niche consultancies such as CRA international or WTS and a
third group by a relatively small number of legal practices, headed by
the largest player in the field, Baker McKenzie. In recent years we
have also seen the establishment of in-house teams in multi-national
companies and some of the major global banks.
One
of the reasons why the pool of talent is still so small is because of
the sheer difficulty of joining it. The complexity of the work means
that professional services firms and in-house departments set very high
academic and technical standards and tend to hunt for recruits who can
‘hit the ground running’ – the idea of addressing the skills shortage
by cross-training good people from other areas of the tax arena still
seems a long way off.
Transfer
pricing specialists consequently tend to come from four sources – the
major accounting firms, the revenue service, from an economics
background or from the legal profession. This last group tends to be
the smallest due to the fact that an individual lawyer’s background and
expertise will usually be limited to one jurisdiction, precluding them
from operating on a truly international basis. Economists will have a
masters degree and often a doctorate too. Attractive to both the
specialist consultancies and the Big 4, their work is of a strategic
nature, mapping out international trends to ensure that pricing and
consequently tax structures are placed in a logical (and beneficial)
economic context.
To join a major
firm from the Revenue, you would need to fit the classic ‘gamekeeper
turned poacher’ profile. Employers look for in-depth exposure to
transfer pricing work in the ‘gamekeeping’ environment, which means
that you will require at least five years’ experience in the field on
high profile investigations. And because you will be moving to a
client-facing, service oriented culture you will also need above
average communication and inter-personal skills.
The
largest group of TP specialists come from within the accountancy
profession itself. And unfortunately, to be in the most marketable part
of it you will have had to have made a key career decision before you
ever read this article or were even aware of this magazine, because
real marketability comes from specialising in TP from day one of a Big
4 graduate training scheme. However if you didn’t, don’t panic, and do
keep on reading, because all is not lost. Since such individuals are so
rare, there is still a route into the field via high quality
international tax work, although if you are serious about TP, you
should take whatever opportunity you can to gain exposure to it at the
earliest possible opportunity.
For
those that do make the grade the rewards can be, and look likely to
continue to be, substantial. In a textbook ‘war for talent’ demand well
exceeds supply, pushing up salaries. In the UK for example a Big 4,
first year manager could expect a base salary upward of 65,000, whilst
in some of the key overseas markets such as Switzerland, this could be
even higher. TP specialists also have a wide range of opportunities to
live and work abroad and are increasingly eagerly sought by the
corporate sector, with attractive financial packages and the prospect
of a better work-life balance.
Case study: Ben Dawkins
“I
took a first degree in economics at a Midlands ‘redbrick’ then went on
to do a masters at Sheffield university. I then joined the graduate tax
training scheme at the London office of one of the Big 4 and gravitated
to international taxation work where I started to get interested in
transfer pricing. After being promoted to manager level and qualifying
CFA I decided to move to another Big 4 firm to get a new perspective
and to gain international exposure. I’m now working as a manager in the
firm’s Zurich office and have relocated to the city with my family. TP
is very challenging but it’s an area where you get to work at very
senior levels with a wide range of household name clients. From
Switzerland we are dealing with organisations literally right across
the globe. And that means, though I’m learning German for social
reasons, our day-to-day business language here is English – which given
my linguistic abilities is just as well!.”
For more information contact Alex Curcio, MRL Financial, alex.curcio@mrl-financial.com – 020 7643 2546.
