In today's global economy, multinational reporting companies routinely implement sophisticated, profit-boosting tax strategies. Perhaps the most effective of such strategies is transfer pricing, a practice in which companies divert their taxable income to lower, off-shore tax jurisdictions. Despite the widespread use of such practices, companies rarely disclose the accounting methods, details or underlying assumptions to their investors; nor do they provide an analysis of these strategies' financial reliability.

This article examines meaningful transfer pricing disclosures under the reporting requirements of the securities laws. Furthermore, this article proposes that companies should take special care to fully disclose their transfer pricing strategies' reliability because of the financial uncertainty involved in transfer pricing. General disclaimers, or even extensive disclaimers, do not adequately enable investors to assess the financial uncertainty underlying such strategies likely expose the company to liability under the securities laws. While the SEC may introduce a customized transfer pricing disclosure framework in the future, companies should proactively strive to make more meaningful transfer pricing disclosures to ensure compliance with the securities laws.