Strategising international Transfer Pricing
The international tax framework is applicable in every country in our post-globalization world today, and Transfer Pricing is one of its key concepts. The focus on tax on value creation under the OECD’s globally accepted Base Erosion and Profit Shifting (BEPS) concept has given Multinational Enterprise (MNE) groups a unique set of challenges along with increasing volumes and daily operational transactions. Amid a continually evolving global regulatory landscape as well as enhanced local compliance measures, Transfer Pricing is a critical issue for many global businesses.
Transfer Pricing is the pricing offered by one member of an MNE group to another member outside the country for exchange of goods, services, financial transactions, and other intangibles. Such cross-border intra-group transactions are a norm today. With these transactions, taxpayers must comply with the many and ever-increasing regulations across jurisdictions, a time consuming and complex affair. It can leave businesses with lesser time and fewer resources for strategic and commercial decisions. With Automatic Exchange of Information (AEOI) and Country-by-Country Reporting (CbCR), tax authorities across the globe share information in real time on cross-border related party transactions (RPTs) through multilateral agreements.
Transfer pricing is a continuous task and a critical item of vigilance for MNE groups, and one that demands high quality skill, time, and effort in equal measure. Hence, MNEs should apply a systematic approach for TP risk management and controls along with compliance obligations such as documentation, TP study (local file), master file, TP records and processes, etc.
At MNA Corporate Services, we have in-depth understanding of compliance requirements under various countries’ local Transfer Pricing regulations, CbCR regulations and tax legislation and assist taxpayers with filings and timely and accurate compliance. Our globally experienced Transfer Pricing team and tax advisors are a one-stop advisory for robust and sustainable end-to-end TP solutions.
MBG Corporate Services supports you with a clear Transfer Pricing strategy both meeting regulatory expectations and aligned with your global business goals. We deliver TP models that, through continuous financial analysis and timely intervention, are consistent and resonant with your value chain, and can change with your changing business dynamics. We ensure that all related party transactions are documented to position your Transfer Pricing model in compliance with regulatory provisions. Our team guides you through complex areas of international tax and mitigates the risk of non-compliance.
We assist with Transfer Pricing if you need:
- Support on your existing TP policies and in complying with documentation requirements
- To implement new TP models driven by changes in the supply chain
- To defend your transfer prices or need assistance in dispute resolution
- To assess BEPS impact
Our range of TP Advisory services include:
- Transfer Pricing -related due diligence and diagnostic reviews
- TP health check, correction of gaps identified from accounting records
- Devising tax efficient and globally defensible TP models in sync with commercial business activities, international TP best practices; OECD BEPS and UN TP Manual based guidance
- Advice to MNE groups on TP related business restructuring and supply/value chain analysis and transformations (VCTs)
- Assistance in drafting TP policies based on pre-benchmarking
- Drafting and vetting of agreements from a TP perspective
- Assistance in implementation of TP models
- Analysis of TP & Tax Updates/ developments to see how they impact current transactional arrangements and TP policies
- Advice on interplay of TP policy with Customs valuations
- Advice on legal vs. beneficial ownership of intangibles and on other aspects under BEPS AP 8-10 (aligning TP outcomes with value creation)
Our TP Compliance and Litigation support services includes:
- Preparation of Transfer Pricing Documentation & Study (Local Files) as per the Local TP & Tax law requirements, as applicable and BEPS guidance, containing industry and group overview, functional, and economic / benchmarking analyses of RPTs against the industry margins and evaluation of Transfer Pricing methods.
- Supporting TP Policies by preparing Three-tiered documentation including Local files, Master files and CbCR templates, as applicable, as per Local Tax law requirementsand BEPS guidance
- Assisting with TP certificate, form filings and related disclosures in tax returns as per respective country TP laws
- Providing tax authority litigation support and dispute resolution related services
