'Abstract science' proves taxing for E&Y director
Jonathan Thompson, director for financial services – transfer pricing at Ernst & Young (E&Y), started off as a graduate trainee in the firm’s London branch. After becoming a chartered accountant, he was moved to the E&Y UK financial services transfer pricing (FSTP) team. In 2008, he moved to Japan to build E&Y Tokyo’s FSTP team, before coming to Hong Kong to do the same for E&Y Asia-Pacific. He talks to Wong Yat-hei
What is your academic background?
I studied economics at the University of Sheffield and am an Institute of Chartered Accountants of Scotland (ICAS) chartered accountant.
How do you start your day?
The morning typically starts by working through e-mails that have arrived overnight. Being a regional team focused on transfer pricing means we work extensively with colleagues and clients in other locations, so a lot of e-mails arrive during the evening or night. This will typically be followed by client meetings or calls to discuss proposals, ongoing projects, internal meetings or operational matters. We also communicate with other E&Y service lines to ensure our transfer pricing analysis is linked to wider tax issues or business-advisory matters.
What does your job entail?
Our team works with multinational financial services organisations to develop transfer pricing policies for international transactions arising in different business lines such as sales and trading, investment banking and transaction banking. We also benchmark and document existing pricing policies and help clients defend challenges from tax authorities regarding the suitability of transfer pricing policies in place.
What are the major job challenges you have encountered so far?
Transfer pricing is an interesting challenge as it is an abstract science. Multinational groups, especially financial-services organisations, often structure their operations to be as international as possible with a goal of operating seamlessly as one international business. As a result, these groups tend to be evaluated on a business-line basis with affiliates in many locations being reviewed based on collective performance, regardless of the location of the individuals providing those services.
Transfer pricing views things slightly differently as it is primarily focused on legal-entity compensation to tax-return filing purposes. This can create an interesting challenge. Equally the international nature of transfer pricing means we’re always working with offices in other countries, which is fun and means we get to experience many different working styles and cultures.
What skills do you need?
Apart from basic technical skills and being numerate, you really must have good people skills. Much of what I have been doing is built on good teamwork, so it’s vital to have good team-building skills and strong communication skills.
What are your future plans?
For my career, I plan to continue to develop our FSTP team across the region.
What advice do you have for those who want to enter the industry?
While it’s good to think about your career over a longer-term horizon, flexibility and being open to constant learning will also be vital as many opportunities will present themselves over time.