Transfer pricing describes the prices charged between related parties. It can represent a significant compliance obligation for multinational groups, as they must maintain documentation to support the prices charged.
Many tax authorities (including the UK) require transactions between related parties to be recognised at ‘arm’s length’ prices for tax purposes. Multinational groups must maintain transfer pricing documentation to support how these arm’s length prices are calculated.
We can assist you with:
- Preparing transfer pricing documentation.
- Undertaking benchmarking to establish arm’s length prices.
- Reviewing inter-company arrangements to identify other potential tax issues, such as withholding tax or VAT.
We can also assist you with the planning opportunities which arise from transfer pricing, by restructuring existing inter-company relationships so that functions, assets and risks are held in low-tax jurisdictions. Even if no tax savings arise from such a restructuring, there can be operational benefits if inter-company relationships can be simplified.