Investing in the form of a foreign Establishment is a common method of running a business on the international scene. However, in relation to transfer pricing, such a business approach requires appropriate (market-based) cost and revenue allocation, between the parent entity and its foreign Establishment.
Given the above, we offer:
- developing a method for allocating profit (through appropriate cost and revenue allocation principles) between an Establishment and parent entity;
- support in determining the level of Establishment funding with capital (so-called free capital) and interest-bearing debt financing;
- support in the valuation of operations between the Establishment and parent entity through conducting appropriate comparative or compliance analyses;
- developing local transfer pricing documentation for the Establishment;
- support in TPR reporting and filing a statement on developing transfer pricing documentation and the application of arm’s length accounting principles.
