Transfer Pricing FAQs
Asked Questions about Transfer Pricing (TP)
Copyright by Lorraine Eden, Texas A&M University, email@example.com
. Last update: February 2017.
- Full-time or part-time? |
- Best undergraduate degree? |
- Best graduate degree? |
- What courses should I take? |
- What skills sets do I need? |
- TP jobs for foreign students? |
- Advice on looking for work after graduation? |
Question: Can I study transfer pricing on a part-time basis?
Answer: At present (May 2017), you cannot study transfer pricing at Texas A&M University on a part-time basis. Students must be full-time graduate students at Texas A&M, studying for a degree in one of three schools/departments (Mays Business School, the Bush School of Government and Public Service or the Department of Economics) in order to be admitted to the Transfer Pricing course (MGMT/INTA/ECON 663). Occasionally, there are seats available for graduate students from other departments or colleges. You may be able to study transfer pricing on a part-time basis at another university.
Question: What is the best undergraduate degree for a career in transfer pricing?
Answer: The best and most common undergraduate degree for a career in transfer pricing is probably economics. At the very least, students should have two or three undergraduate economics classes, or take them as part of their graduate studies program. An undergraduate degree in business administration is also very common. Other undergraduate degrees are also very doable (e.g., math, engineering, political science), especially if the student's graduate degree program contains some economics-based courses.
Question: What is the best graduate degree for a career in transfer pricing?
Answer: there are several degree programs that can lead to a successful career in transfer pricing. The best graduate degree, in my opinion, is a program that permits students to put together a program of courses on multinationals and transfer pricing with courses from economics, accounting, finance, international business and quantitative methods. Some examples (in no particular order) are:
- Masters in International Affairs with a track/major in International Economics or International Business
- Masters in Business Administration (MBA) with a track/major in International Economics or International Business
- Masters in Finance with a track/major in International Finance or International Economics.
- Masters in Economics with a track/major in International Trade or International Business
- Masters in Accounting with a track/major in International Tax, Valuation or Auditing
Question: What courses should I take if I want a successful career in transfer pricing?Answer:There are several courses that can help you prepare for a successful career in transfer pricing. Since typical placements in TP careers come from students in a masters degree program, the recommendations here are for courses at the graduate level. The four most important courses are:
- Transfer Pricing (highly recommended, but few universities offer a graduate course on transfer pricing)
- Multinational Enterprises (a graduate course on the strategies and structures of multinational firms is very useful)
- Financial Statements Analysis (an accounting course on reading financial statements is a must requirement)
- Quantitative Methods in Statistics, Advanced Excel (including pivot tables) and Econometrics are useful.
There are many other courses that can round out a program of studies relevant to transfer pricing. Examples include courses in economics (microeconomics, international trade and financial, industrial organization), finance (international finance), accounting (tax, management accounting). A CFA (Certified Financial Analyst) qualification at Level 1 or Level 2 is also very useful.
Question: What skill sets are needed for a successful career in transfer pricing?Answer: There are several skill sets that contribute to a successful transfer pricing career. Since TP careers are typically within consulting firms (e.g., the Big Four), the same skill sets that are important in a consulting career are as important in a TP career. These include:
- Logical Mind: One of the traits I have noticed in successful TP professionals is that they have logical minds and enjoy solving puzzles. They like to think logically about how to solve problems.
- Soft (social interaction) skills: Individuals with social interaction skills are good at working, collaborating and leading teams and organizations.They are "people savvy", that is, they can read social situations, diffuse conflicts and build rapport with clients. They are sociable people who enjoy working with people. Often they are charismatic also. Individuals with strong soft skills have the ability to persuade, influence and negotiate with teams, groups and clients.
- Presentation skills: Individuals with presentation skills have excellent oral and written communication skills. They can listen effectively, summarize the key points, answer questions, and lead discussions.They can make successful presentations to any and all groups. They can communicate their ideas clearly and successfully to clients.
- Work ethic and positive attitude: Being professional -- that is, having a strong work ethic and go-getter attitude (someone who is always willing to learn and to go the "extra mile" at work) -- is important, especially within the top-tier consulting firms. Exhibiting positive energy at work matters as does being able to work under pressure. Time management skills are also important.
Question: Should I take Prof. Eden's TP course in the Fall or Spring semester?Answer: I usually recommend that students take my TP course in the Fall rather than the Spring semester. This is because the TP firms are typically on campus in the Fall semester (October and November) doing interviews for internships that will take place the following summer and also interviews for full-time positions that will start in January or June of the next year (depending on the student's graduation date). So, for example, students who take my TP course in Fall 2016 will go through the interview process in Fall 2016. If they do not receive or accept a TP offer that semester, they can go through the interview process the next semester also (e.g., Spring 2017) for internships or full-time positions to start in Summer 2017. For this reason, I offer TWO sections of the TP course in the Fall semester, but only ONE section in the Spring semester; this reflects the way that TP firms interview and hire.
Update (Feb 2017): In 2017-2018, the Transfer Pricing course will only be offered in the Fall semester. The course will NOT be offered in Spring 2018. Any student who wishes to take the course in 2017-2018 must take it in Fall 2017. There will be two sections: section 601: MW 2:20-3:35 pm and section 602: MW 4:30-6:00 pm. Both taught in 181 Wehner. This is a high-demand course with capped enrollment so early registration is a must. Please contact the graduate advisor in your department for information on how to register for this course.
Question: Are there situations where I would be better off to take Prof. Eden's TP course in the Spring Semester?Answer: Yes, there are situations where students might be better to wait and take the TP course in the Spring semester.
First, students who are not sure whether TP is a career path for them or want to explore alternative career paths first might be better waiting and taking the TP course in the Spring semester. That way, they can spend the Fall semester looking at other options (e.g., State Department, national security agencies). With the TP firms coming on campus primarily in the Fall semester, a student may be faced with the situation of receiving one (or possibly more) TP internship offers before the student really knows whether s/he is really interested in a TP career.
Second, students who have poor written and/or oral English skills (e.g., new arrivals on campus from foreign countries where English is not the native language) would be better waiting a semester and working on their English in the Fall semester before going on the market for a TP position. Since transfer pricing relies so heavily on written and oral English skills, students with poor English are highly unlikely to receive an US placement offer; in these situations, students might be would be better off to wait and work on their English before going on the job/internship market in the TP area. Similarly, students with a weak background in economics might find taking one or more economics-based courses in their first semester good background training and then take the TP course in the spring semester. See my May 2016 paper on "Foreign Student Placement in US Transfer Pricing Careers" for more details.
Question: Should I take Prof. Eden's TP course in the first or second year of my masters degree program?
Answer: Normally, students should take the TP course in the first rather than the second year of two-year degree masters degree programs. This is because the TP firms prefer to have their new hires complete a summer internship before the firm makes a decision on whether to make a full-time job offer. Students who take the TP course in the Fall semester of their first year go through the interview process that semester and normally accept a summer internship offer in the Fall, with the internship taking place in June-August of the following year. Students who have interned with a TP firm typically receive a full-time offer at the end of their summer internship, with the start date after their graduation in December of that year or May of the following year. The "normal" progression is therefore:
- Year 1: courses in Fall and Spring; internship in Summer.
- Year 2: Job offer at the end of the internship. Classes in Fall and Spring. Start work in Summer.
Question: Are there situations when I would be better off to take Prof. Eden's TP course in the second year of my masters degree program?Answer: Yes, there are situations when I recommend that students wait and take the TP course in the second year of their masters degree program. First, many students are unaware of transfer pricing as a career option and so only find their way into TP by word of mouth from other students, which means they take the course later in their program of study. Second, even if students are aware of TP as an option, they may prefer to take the course later. Third, many students may have no free electives during the first year of their degree program and so have no alternative but to take TP in their second year.
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Question: Can I find a TP placement in the United States if I am a foreign student?
Answer: Yes, it is possible to find a full-time TP placement in the United States after graduation from a US university. Due to the shortage of trained TP professionals many firms will hire foreign students and help students through the OPT process. However, the students must have superior English oral and writing skills (at or above the level of the average American college student) before they will even be considered for possible job openings. Foreign students with below average English oral and written skills should either improve their skills, look for TP placements outside of the United States, or consider other career paths. See my May 2016 paper on "Foreign Student Placement in US Transfer Pricing Careers" for more details.
Question: I have already graduated and am looking for a TP job. Do you have any advice for me?
Answer: Yes, if you have graduated and are looking for jobs in TP, some suggestions are listed below. (Note that these suggestions assume you have a relevant degree and training suitable for a successful career in transfer pricing. If you do not, then the suggestions below are unlikely to prove successful.)
- The two main windows for TP hiring at the university level are October/November and February/March. Entry-level TP jobs come open around the year, of course, but most TP firms concentrate their university-level hiring during these months. It makes sense then to concentrate your own looking for TP employment during this window if you are a recent university graduate.
- Log onto the various TP firms' websites, search for jobs under “transfer pricing” and start applying. Remember that each office location for a Big Four firm is a DIFFERENT office and so hiring goes through that particular office (e.g., EY Chicago and EY Boston are two separate firms when it comes to hiring).
- Search aggregator boards like LinkedIn and GlassDoor for TP positions using key words like "transfer pricing", "tax" and "analyst". The job aggregator boards change weekly so check at least once a week.
- Graduates with a masters degree should be looking for openings at the consultant/associate and senior consultant/associate levels. Graduates with an MBA, PhD or at least two years of relevant work experience should look for jobs at the senior consultant/associate level.
- Create a resume specific to transfer pricing and attach that to your job applications. Follow the format that my students are using in the Transfer Pricing Aggies Student Profile Book, which was developed specifically for TP careers.
- Update your LinkedIn page. This is the first place where employers will go to look if they are interested in your cover letter and resume. Follow the instructions on LinkedIn for what a great page should look like (including advice on your photo). Join some of the TP groups on LinkedIn and pay attention to the conversations.
- Contact TP professionals who are working at the firm and/or location where you would like to work and ask if you can talk to them about TP careers either in person or on the telephone. Do an informational interview.
- Many job offers come from making contact with individuals you know who are already working inside that organization. For example, reaching out to a classmate who is now working in tax or transfer pricing within one of the Big Four firms may be the fastest way to landing at least a telephone interview with the firm. Many of the TP firms now reward their employees with a bonus if the employee recommends an individual who is later hired by the firm; thus, your contacting them may benefit them also.
Note from Lorraine Eden: If you have suggestions for other FAQs that should be added to this page, please email your suggestions to firstname.lastname@example.org.
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