Transfer pricing

Transfer pricing

Transfer pricing is one of the most important tax matters you need to have under control. The tax rules that apply to international business are complex and frequently subject to change.

Documentation

To avoid significant penalties and tax assessments, it is essential to comply with documentation requirements and related legislation. We'll support you in minimising risks, developing a solid transfer pricing model and policy, and navigating any financial, legal or tax-related issues that may arise.

Arm’s length principle

Intercompany transfer prices must reflect the pricing that would apply in a comparable transaction between independent parties. To assess whether a transaction between affiliated entities is priced appropriately, both the pricing and its underlying methodology must be evaluated. This is known as the arm’s length principle and it helps prevent, for example, the shifting of profits to jurisdictions with low corporate tax rates.

Consistent policy

It is essential that your organisation has a consistent transfer pricing policy. Within your internationally operating group, intercompany pricing directly affects the allocation of profits and, in turn, the corporate tax liability in each country where your business operates.

Compliance with laws and regulations is a key reason to keep your transfer pricing framework in order. At the same time, it offers an opportunity to optimise your tax position by avoiding double taxation. A consistent policy ensures that each country can tax a fair share of the group’s total profit, in line with the functions performed and risks assumed in each jurisdiction. We're happy to help you explore your options.