SEC Roundup: Various MNEs Report IRS Transfer Pricing and related Adjustments
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By Sony Kassam
Dell Technologies Inc., a Texas-based information technology company, reported that the IRS Office of Appeals is reviewing its federal income tax returns for 2007-09 and that the agency proposed transfer pricing adjustments for those years, according to a filing with the Securities and Exchange Commission.
In addition, Analogic Corp. reported that it accrued interest by $1.8 million partly due to settling a transfer pricing audit in Denmark.
They were among nine companies reporting issues related to transfer pricing to the SEC in September 2017. An alphabetized list follows.
Analogic Corp., a health care and security technology company based in Peabody, Mass., said it’s uncertain tax positions reduced by $0.5 million due to the settlement of a transfer pricing audit. It also reported that it accrued interest by $1.8 million in fiscal year 2017 “as a result of the closing of statutes of limitation for fiscal year 2013 for domestic entities, the remeasurement of uncertain tax benefits in open years, and settlement of a transfer pricing audit in Denmark.”
Brocade Communications Systems Inc., a San Jose, Calif.-based technology firm, said it recorded an operating loss before tax and a net discrete benefit from releasing reserves after settling transfer pricing issues with the Geneva Tax Administration during the nine months ended July 29, 2017.
CH2M Hill Companies Ltd., an Englewood, Colo.-based engineering firm, said it received a 280.8 percent tax benefit for 2016, due in part to the release of valuation allowance from foreign net losses as a result of a change to its transfer pricing strategy.
Cisco Systems, Inc., a San Jose, Calif.-based networking equipment company, said its unrecognized tax benefits at July 29, 2017, may decrease by about $100 million in the next 12 months if transfer pricing issues are resolved.
Cooper Companies Inc., a Pleasanton, Calif.-based medical equipment company, said the British tax authority has looked into whether it applies to the U.K. diverted profits tax, including a review of its 2015 transfer pricing.
Dell Technologies Inc., an information technology company based in Round Rock, Texas., said the Internal Revenue Service’s Office of Appeals is reviewing the company’s federal income tax returns for 2007-09. It also said the IRS issued a report related to those years during the fiscal year ended Feb. 3, 2017, and that the agency proposed adjustments mostly related to transfer pricing.
Harris Corp, an international communications equipment company based in Melbourne, Fla., reported tax fees of $1.23 million in fiscal year 2017 “related to tax compliance, including foreign and domestic return preparation and transfer pricing studies,” as well as $2.38 million related to tax planning and advisory services.
Keysight Technologies, Inc., an electronic measurement service company based in Santa Rosa, Calif., said it reduced its deferred tax liability by $9 million during the third quarter of 2017 to comply with transfer pricing policies.
Nutanix Inc., a San Jose, Calif.-based cloud computing company, reported a $11.8 million positive adjustment for transfer pricing in the fiscal year that ended July 31, 2017.