Currently, the Wandfluh Group is facing the problem of generating profits in high-tax countries whereas lower profits or even losses are generated in low-tax jurisdictions, thus not reaching an optimal distribution of profits. Furthermore, the company is considering an organisational change to a more efficient and harmonised organisational structure. It is therefore of interest for Wandfluh to get an overview of the current situation as well as recommendations regarding organisational structure, variable pay, and transfer pricing for the future development of the company.

The aim of this Bachelor Thesis is to investigate the current literature and best practices in profit distribution in a multinational enterprise (MNE). For this, a thorough literature review on the Transfer Pricing Guidelines from the Organisation for Economic Co-operation and Development (OECD), the Action Plan on Base Erosion and Profit Shifting (BEPS), organisational change and variable pay provide the theoretical framework for this thesis. The gained knowledge from the literature is then applied to the specific case of the Wandfluh Group.

The results of the financial statements analysis suggest that profits are, from a tax perspective, not optimally distributed. Furthermore, the currently applied transfer pricing system could be further harmonised with the OECD Transfer Pricing Guidelines. Thus, the authors propose solutions to a more OECD compliant transfer pricing scheme. This restructuring also leads to subjects which could be additionally addressed such as organisational design, change management, and variable pay. In regards with this the authors give recommendations on which organisational form could be implemented and to which aspects management has to pay attention to, to best implement the proposed strategy. Furthermore, Key Performance Indicators (KPIs) are proposed on which the variable pay could be based on. In sum, this thesis gives the Wandfluh AG an overview over the current practices and provides the client with a decision-making framework which could be applied with regard to an implementation of an OECD compliant transfer pricing scheme, a new proposed organisational structure, and KPIs usable for determining variable compensation.