Global trade relies heavily on logistics services. However, the Logistics industry faces numerous challenges today due to geopolitical tension, supply chain reconfiguration, digital disruption, and increasing tax authority scrutiny.
Multinational logistics providers, third-party logistics companies (3PLs), freight forwarders, and last mile delivery operators must now navigate not only operational challenges, but also an international tax and transfer pricing compliance environment that remains closely controlled.
Logistic companies operating across borders face various intercompany transactions related to warehousing, transportation, freight forwarding and support services being reviewed closely. Intragroup activities like route planning, customer support, fleet management, pricing IT systems must also be performed objectively. Any centralized warehousing or hubs that are registered in low tax jurisdictions could also come under closer tax examination while cost sharing allocation of global transportation networks must also have documentation supporting defensible rationale in place.
How T1 Advisory Supports Clients
- Develop tailored transfer pricing models for intercompany freight services, warehouse storage, fulfillment operations and support services.
- Prepare Master Files, Local Files and Country-by-Country Reporting that accurately reflect the unique operational flows of logistics companies.
- Advise on entity structuring to comply with OECD substance rules and local tax regulations.
- Provide DEMPE function analysis on IP developed across jurisdictions.
- Assess the impacts of OECD BEPS 2.0 Pillar Two’s 15% global minimum tax on logistics hubs and shared service centers.
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