Why?
The issue of transfer pricing concerns the obligation to preserve the market relevance (so-called arm’s length principle) of the terms and conditions integrated into transaction between affiliates (so-called controlled transactions). To be as straightforward as possible, the prices in such transactions should not deviate from the prices applicable in uncontrolled transactions, namely, between independent counterparties. A deviation from this principle may potentially imply a dispute with tax authorities that can adjust the tax result to a level arising from the application of market prices.
The field of transfer pricing is a highly standardised domain of international tax law, largely based on OECD guidelines. The adopted methods for determining and verifying transfer pricing heavily refer to the knowledge, practice and methodology drawn from economic sciences. However, it is also a field of ever-growing complexity, since legal regulations related to transfer pricing are often updated in pursuit of the rapidly developing global business models and changing value chains.
Correct and safe application of transfer pricing regulations requires familiarity with the law, economics and methodological standards inherent to this field, and also access to specialist database systems that offer insight into updated corporate financial data. It is also a need to ensure multi-level and frequently updated documentation.
Depending on the scale of business and industry specificity, the vulnerability of the transfer pricing field to risks of potential disputes with tax authorities may differ. Nevertheless, it should be assumed that in the case of large-sized international enterprises, the highest tax risk potential is often associated with transfer pricing. In addition, transfer pricing is also one of the issues most often audited as part of tax investigations and inspections.
For whom?
All enterprises operating under complex, international or domestic organisational structures, comprising entities that are affiliated through capital, family ties, management or otherwise establishing a control or dependence relationship.
How?
Our specialists ensuring the compliance of adopted transfer pricing policy within a group, as well as individual transaction and documentation solutions with applicable standards involve, among others:
- drawing up documentation, reports, statements and conclusions related to transfer pricing,
- developing benchmark studies for commodity and service transactions,
- support in restructuring processes,
- support in the course of tax audits,
- conducting training and workshops on transfer pricing.
