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Cybersecurity is no longer just an IT issue—it’s a strategic, board‑level risk. For multinationals, breaches, ransomware, and compliance failures can instantly damage value and reputation. Because of this, many groups centralise spending on firewalls, monitoring tools, audits, and cloud security.
Most groups now centralise cybersecurity spend; global firewalls, cloud protections, penetration tests, and audits. But a critical transfer pricing question follows:
Should these costs be recharged to subsidiaries? And if so, how?
In this article, our Transfer Pricing Team highlights why cybersecurity is different:
- Benefits are preventive (you gain from what doesn’t happen).
- Subsidiary risk profiles vary widely across markets.
- Costs are hybrid in nature; partly global compliance, partly local benefit.
The result: cybersecurity charges can become a hidden TP exposure if left unstructured. This publication provides practical insights on how to address the issue before Revenue Authorities do.