Transfer prices, i.e. the prices at which goods and services are sold between associated enterprises, are acknowledged to be the most important international tax issue facing multinational businesses.
Multinational companies face with the decision whether taking risk of additional tax assessment and tax penalties or giving the priority to the system approach to document their Transfer Pricing settings. Regarding considerable volume of inter-company transactions, Transfer Pricing policy might result in significant tax consequences for your company.
Transfer pricing solutions, such as effective restructuring, re-pricing or refinancing of transactions can play an important role in assisting your group of companies in maintaining its competitive advantages and meeting shareholders’ financial expectations. But, at the same time, while multinationals see the borders as irrelevant for developing their business, tax authorities become increasingly aware of the manner in which transfer prices can affect the taxable base in their country. We are thus facing an increasing enforcement of existing tax regulations, particularly from a documentation perspective.
Some of the most frequent types of intra-group transactions , for which prices involve a higher degree of subjectivity, thus making them more prone to tax inspectors’ adjustments, are:
- inter-company loans granted by the group
- provision of goods and services to/by group entities
- royalties paid for international utilization of group-owned intellectual property
- fees paid for management services received from other tax jurisdictions.
In consideration of the foregoing, it seems more and more advisable for companies to prepare the transfer pricing file in advance, as this represents your only tool for coping with tax audits without major adjustments (and related penalties).
Working in close cooperation with our colleagues of other Mazars offices, we have acquired broad and thorough knowledge of the solutions that have proved successful with clients active in various industries, as well as insights into the specificities of the approaches adopted by tax authorities.
Mazars Tax professionals combine technical skills of tax with economic and business management, with a view to helping our clients to document their transfer pricing mechanisms and mitigate transfer pricing risks.
Our assistance in the transfer pricing field includes:
- Preparing/reviewing of the Transfer Pricing documentation
- Adapting group documentation (Masterfile) to the specific local requirements/regulations
- Assessing tax risks of Transfer Prices
- Proposing transfer pricing strategy and Transfer Pricing planning
- Comparative analysis with using of internationally acknowledged database Amadeus
- Application for advance pricing arrangements
- Representing during the tax proceedings
- Customised trainings
- Close cooperation with the Mazars offices in the Transfer Pricing field