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      Transfer Pricing in focus

      In 2026, evolving tax policy and advances in AI continued to shape transfer-pricing considerations— from regulatory requirements and how businesses create value to readiness for change.

      Regulatory complexity and transparency intensified. Proposed revisions by the Organization for Economic Co-operation and Development (OECD) to the guidance on intra-group services, the continued evolution of Pillar Two, expanding public country-by-country reporting requirements, and heightened scrutiny of financial transactions all raised expectations for consistency, substantiation, and defensible outcomes. For multinational groups, the priority is increasingly clear: monitor developments across jurisdictions while keeping policies, documentation and reported data aligned.

      AI is reshaping value creation and transfer-pricing operations. As generative AI (GenAI) became more embedded in business models and workflows, it changed the significance of data, technology development, strategic decision-making, and other activities across the value chain. These shifts are prompting many organizations to revisit functional profiles, IP arrangements, cost allocations, and profit attribution – even as AI-enabled platforms begin transforming how transfer-pricing analysis and delivery are performed.

      Connected, data-driven readiness is now a strategic imperative. Leading transfer-pricing functions are moving beyond fragmented systems and reactive compliance and toward operating models that connect policy, people, processes, data and technology. A reliable data foundation, stronger links to business decision-making, coordinated execution, and clear AI governance can help teams respond faster to regulatory and operational change while contributing more strategically to the enterprise.

      This article highlights the year’s key developments and what they could mean for transfer-pricing leaders preparing for 2027.

      Tax policy

      Navigating an evolving transfer-pricing policy landscape

      The global transfer-pricing landscape has evolved in 2026 as governments and tax authorities introduced new rules, reporting requirements and guidance. Across jurisdictions, developments reflect greater expectations around transparency and substantiation, alongside targeted efforts to simplify compliance and provide greater certainty for taxpayers.  For multinational organizations, these developments reinforce the importance of monitoring changes across jurisdictions and maintaining transfer-pricing policies, documentation and data that can respond to evolving regulatory requirements and increasing scrutiny by tax authorities.

      On 1 June 2026, the OECD released a public consultation document proposing revisions to Chapter VII of its Transfer Pricing Guidelines, covering intra-group services. The proposed revisions aim to clarify the guidance, align it with the principles in Chapters I–III and introduce additional practical examples, without changing the underlying general principles.² As the OECD continues its work in this area, forward-looking businesses should closely follow the evolving guidance and consider how potential changes may affect their approach to intra-group service arrangements and related transfer-pricing policies.

      The OECD’s ‘Side-by-Side Package’ was another guidance that provided greater clarity around the interaction of different minimum tax regimes, creating a more-defined environment in which businesses can evaluate cross-border structures and intercompany arrangements.

      From a transfer-pricing perspective, groups should consider how the location of functions, assets, risks and profits across jurisdictions aligns with their operating model – and how changes to that model may affect their broader Pillar Two position. 

       

      Increasing transparency through Country-by-Country reporting

      Public country-by-country reporting requirements continued to take shape in 2026, increasing the amount of tax and business information that may become publicly available. Developments in Australia, France and across the EU highlight the need for multinational groups to consider not only compliance with these requirements, but also the consistency of information reported across tax filings and other disclosures.

       

      Increasing focus on tax controversy and dispute resolution

      As transfer-pricing scrutiny continues, multinational groups are looking for effective ways to prevent, manage and resolve disputes. Advance pricing agreements (APAs) and mutual agreement procedure (MAP) remain important mechanisms for enhanced certainty, while court decisions and audit developments continue to demonstrate the importance of aligning transfer-pricing outcomes with the underlying functions, risks and facts of the business.  

       

      Continued scrutiny of financial transactions

      Recent court and tax authority developments demonstrate continued attention to the arm’s length pricing of intra-group loans and cash pooling arrangements, including the selection of appropriate comparables, interest rates, credit ratings and the underlying economic substance of financing arrangements.

      Technology and AI in Transfer Pricing

      AI continued to reshape transfer pricing in 2026, both in how transfer pricing work is performed and in how businesses create value. GenAI is increasingly influencing business models, operating processes, workforce structures and value chains, raising important transfer-pricing questions around functions, assets and risks, intellectual property (IP), cost allocation and the location of value creation. As organizations integrate GenAI into their operations, transfer-pricing teams should consider whether existing policies and operating models continue to reflect how value is created across the enterprise.

      The implications extend beyond technology and IP ownership. GenAI can change the relative importance of activities within a value chain, including data and analytics, strategic decision-making, technology development and other functions that may take on greater significance as AI becomes embedded in business operations. These changes may require organizations to reassess functional profiles, intercompany arrangements and the allocation of profits among entities, as well as consider how the development, enhancement, maintenance, protection and exploitation of AI-related IP are managed across the group. Data is also becoming increasingly relevant to transfer-pricing analysis, alongside evolving questions around comparability and benchmarking as GenAI adoption transforms the way businesses operate. 

      How Will Generative AI Affect Value Chains and Transfer Pricing?

      Is Adoption of Generative Artificial Intelligence (GenAI) Redefining Value and Transfer Pricing? (Part 1)

      Is Adoption of Generative Artificial Intelligence (GenAI) Redefining Value and Transfer Pricing? (Part 2)

      Transfer Pricing reimagined

      Building readiness into transfer pricing

      As transfer-pricing teams navigate regulatory change, growing controversy, increasingly complex business models and rapid advances in technology and AI, being prepared for change is becoming just as important as responding to it. KPMG’s 2026 KPMG Global Tax Readiness Dividend highlights a widening divide between tax functions that are integrated, adaptable and equipped to operate at scale versus those constrained by fragmented systems, disconnected data and reactive execution.¹

      For transfer pricing, readiness means connecting policies, processes, people, data and technology – positioning the function to respond effectively as business and regulatory requirements evolve. This is crucial given the cross-functional nature of transfer pricing – where tax teams depend on information and decisions spanning finance, legal, operations and the broader business. Rather than approaching policy, implementation, documentation and controversy as separate activities, leading transfer-pricing functions can benefit from a more-connected operating model.

      1. Connect transfer pricing with the broader business

      Transfer pricing should reflect how an organization operates and how value is created across the business. Building stronger connections between transfer pricing and broader business decision-making can help teams identify changes to functions, assets and risks earlier, and assess whether existing policies and intercompany arrangements remain aligned with the operating model. This reflects the   broader principle of integrating the tax function more closely with enterprise decision-making.¹

      2. Build a reliable data foundation

      Access to consistent, high-quality data is foundational to an effective transfer-pricing function, particularly as organizations expand their reliance on AI and automation. KPMG’s 2026 KPMG Global Tax Readiness Dividend identifies reliable data environments as an important characteristic of organizations that are better-positioned to integrate AI effectively.¹ For transfer-pricing teams, strengthening the connection between financial data, intercompany transactions, transfer-pricing policies and documentation can support more-efficient analysis and provide a stronger foundation for technology-enabled processes.

      3. Move from fragmented processes to connected execution

      Transfer-pricing processes often span multiple systems, jurisdictions and stakeholders. Greater standardization and coordination across activities such as calculations, monitoring, documentation and reporting can help create a more-scalable operating model. This reflects a central finding of KPMG’s 2026 KPMG Global Tax Readiness Dividend research: Technology modernization alone does not create readiness if processes, systems and decision-making remain fragmented.¹

      4. Prepare the transfer-pricing workforce for AI

      AI is creating new opportunities for tax functions – but technology investment needs to be accompanied by the appropriate skills, governance and operating model. KPMG’s 2026 KPMG Global Tax Readiness Dividend finds that the strongest AI outcomes are associated with tax functions possessing reliable data, clearer governance and operating models capable of supporting AI at scale.¹ For transfer-pricing teams, this means considering not only where AI and automation can improve efficiency, but also how professionals’ roles and skills may need to evolve as technology becomes more embedded in day-to-day work.

      5. Make readiness continuous

      Transfer-pricing readiness is not a one-time transformation initiative. As regulations, operating models, data requirements and technology continue to change, organizations should regularly assess whether their transfer-pricing framework is keeping pace. A connected approach can give transfer-pricing teams greater flexibility to respond to change while supporting consistency across policy, implementation, compliance and controversy.

      Looking ahead to 2027

      As multinational organizations prepare for 2027, transfer-pricing teams face a rapidly evolving environment shaped by regulatory developments, increased transparency, changing business models and advances in AI. The developments of 2026 highlight several areas that transfer-pricing teams should keep in focus in the year ahead:

      Stay connected to how the business creates value

      Business models, value chains and operating structures will continue to evolve, particularly as organizations adopt new technologies and expand the role of data and AI. Transfer-pricing teams should stay close to the business so they can identify changes to functions, assets and risks early and assess whether existing policies, IP arrangements and intercompany transactions continue to reflect where and how value is created.

      Prepare for the next phase of AI

      AI is moving quickly from experimentation toward greater integration into business processes and tax workflows. In 2027, transfer-pricing teams should look beyond individual AI tools and consider how data, processes, technology, governance and workforce skills fit together. A strong foundation can (RC) help organizations identify where AI can enhance transfer-pricing activities while also allowing teams to respond to the transfer-pricing implications of AI-driven changes across the business.

      Build readiness for continued regulatory change

      Evolving OECD guidance, greater transparency through public country-by-country reporting, changing local requirements and continued tax authority scrutiny are likely to (RC) keep transfer pricing high on the agenda. Organizations should monitor developments across jurisdictions and maintain consistent data, documentation and governance so they can respond as requirements evolve. At the same time, APAs, MAP and other dispute prevention and resolution mechanisms should remain part of the broader strategy to manage transfer-pricing risk and ensure clarity amid rapid change.

      Make transfer-pricing readiness continuous

      Transfer pricing should continually assess whether their policies, people, processes, data and technology remain aligned with both regulatory expectations and the organization’s operating model. Entering 2027 with a connected and adaptable transfer-pricing framework can help organizations respond to change while positioning the function to contribute more strategically to the business.

      Stay connected to how the business creates value

      Business models, value chains and operating structures will continue to evolve, particularly as organizations adopt new technologies and expand the role of data and AI. Transfer-pricing teams should stay close to the business so they can identify changes to functions, assets and risks early and assess whether existing policies, IP arrangements and intercompany transactions continue to reflect where and how value is created.

      Prepare for the next phase of AI

      AI is moving quickly from experimentation toward greater integration into business processes and tax workflows. In 2027, transfer-pricing teams should look beyond individual AI tools and consider how data, processes, technology, governance and workforce skills fit together. A strong foundation can (RC) help organizations identify where AI can enhance transfer-pricing activities while also allowing teams to respond to the transfer-pricing implications of AI-driven changes across the business.

      Build readiness for continued regulatory change

      Evolving OECD guidance, greater transparency through public country-by-country reporting, changing local requirements and continued tax authority scrutiny are likely to (RC) keep transfer pricing high on the agenda. Organizations should monitor developments across jurisdictions and maintain consistent data, documentation and governance so they can respond as requirements evolve. At the same time, APAs, MAP and other dispute prevention and resolution mechanisms should remain part of the broader strategy to manage transfer-pricing risk and ensure clarity amid rapid change.

      Make transfer-pricing readiness continuous

      Transfer pricing should continually assess whether their policies, people, processes, data and technology remain aligned with both regulatory expectations and the organization’s operating model. Entering 2027 with a connected and adaptable transfer-pricing framework can help organizations respond to change while positioning the function to contribute more strategically to the business.

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      Burcin Nee

      Head of Global Transfer Pricing Services

      KPMG International

      1.  2026 KPMG Global Tax Readiness Dividend , KPMG International, 2026.

      2. OECD (2026), Revisions to Chapter VII of the OECD Transfer Pricing Guidelines – Special considerations for intra-group services, public consultation document, 1 June–22 July 2026, OECD.