Transfer pricing

Internal transfer pricing should be in line with market standards. Transactions in your company – or group of companies – are required to have a professional basis. In addition, as an entrepreneur you are obliged to document the basic premises used for calculated prices and agreements concluded. In other words, you must demonstrate that you are employing internal prices that you would also agree to with independent third parties.

The increased attention for transfer pricing places greater demands on the internal organisation and on reporting. The burden of proof for the accuracy of the transfer prices is now on the entrepreneur. Insufficient documentation can lead to prolonged, costly discussions with the tax authorities. Inaccurate transfer pricing can lead to high additional tax assessments and fines.

Our transfer pricing specialists keep a painstaking watch on the developments in this area. We can use advise and support you in designing and implementing your transfer pricing schemes, according to the latest information. In centralising services, we determine the right costs and margins based on up-to-date benchmarking. This process involves, for example, pricing of shared services, supply chain analyses and cost-sharing agreements.

In addition, Grant Thornton also supports the procedures you choose to undertake with respect to the tax authorities, including:

Supervising tax audits

• Consulting and negotiating with the tax authorities
• Establishing and obtaining approval for transfer agreements
• Conducting precautionary meetings with the tax authorities by means of advanced pricing agreements (APAs)

Want to know more? For more information, contact us.