TRANSFER PRICING

WHAT IS TRANSFER PRICING?

When two or more companies that are under the same ownership trade goods, services or provide funding to each other, we have an intercompany transaction. The price charged for this transaction is called the Transfer Price.

Tax authorities around the world are looking at transfer pricing more than ever. That’s because transfer pricing has been used by some high-profile multinationals as a way of diverting profits to countries with lower tax rates.

It’s also often an area of compliance weakness, and tax authorities are focussing on it as a means of increasing tax revenue. As a result, transfer pricing has been put under the spotlight and linked to harsher penalties and new documentation requirements.

KEEPING THE TAX AUTHORITIES AT ‘ARM’S LENGTH’

To keep the tax authorities happy, transfer prices must be made on an ‘arm’s length’ basis – which means matching the inter-company price against the market price for a similar transaction between two unrelated organisations.

If you’re a large company, you’ll need documentation to support your transfer pricing.

COVERING ALL YOUR COMPLIANCE BASES

We’ll help you to suitably price, benchmark, document and support your transactions in a consistent, easily understood way. We’ll also advise and assist you in establishing internal review processes that ensure you won’t fall foul of any rules, face any transfer pricing tax adjustments, or any penalties.

If you’re part of an international group, you’ll need to keep your overseas tax authorities happy too. Both tax authorities will want a piece of the pie, and we can help slice it for you.

In short: staying compliant can be tricky, but we’re here to help.

EXPAND OVERSEAS WITH OUR TAX GEEKS

We’ve got loads of transfer pricing experience between us. In fact, some of our team love transfer pricing and international tax so much that they’ve done extra exams on it!

We’re part of a wider tax team that was voted Tolley’s 2018 Best Tax Practice in the UK, and we’ve got great relationships with international tax specialists all over the world. So, when it comes to keeping you compliant, we know exactly how to make sure you’ve got complete peace of mind.