Do you have multiple companies or does your company operate in several countries? In such a situation, you may not just have external customers but internal customers (your own companies) as well. You are then required, under both national and international law, to support the prices and other conditions for the mutual use of services, goods or rights of your company correctly. This is called "Transfer Pricing".
The importance of Transfer Pricing
With more international activity, your tax obligations toward various foreign governments will also be extended. Higher levels of cross-border transactions therefore require a more extensive - and consistent - registration in your records of the underlying transactions within your group. A good record of the internal transfer prices applicable within your enterprise is indispensable and a key component of your risk management. After all, a lack of good Transfer Pricing documentation may result in time-consuming and costly discussions with various tax authorities and/or in your profits being taxed double. Let us give you advice! Download our brochure.
- Download our PDF: Potential impact of COVID-19 on your current transfer pricing model: Is action required?
Rules in the Netherlands
At the end of 2015, additional legislation relating to Transfer Pricing came into force. This has major implications for international companies with one or more companies or permanent establishments abroad. From the 1st of January 2016 onwards, a distinction has been made on the basis of the consolidated group turnover with respect to the documentation requirements and defining group information. We refer to the document in the link below for more detailed information. However, Transfer Pricing is not only an issue in international situations. Under Dutch law, companies are also under a statutory obligation to document transactions between divisions conducted within the same country.
Baker Tilly supports you in identifying the tax risks in your Transfer Pricing system, in minimising these risks and in spotting opportunities. This can be achieved in several ways:
- Optimisation of your business model for tax purposes
- Guidance of your organisation with respect to its legal obligations
- Guidance in concluding Advanced Pricing Agreements
- Support in discussions with the Dutch Tax Administration
Do you have questions about Transfer Pricing?
As a consultant to Small and Middle Market Enterprises, treated as corporate, Baker Tilly is familiar with the operations of a wide spectrum of companies and is consequently ideally able to practically and efficiently identify the various business processes you rely on for your profits. In addition, the Baker International network offers excellent opportunities for you to have your Transfer Pricing documentation in different tax jurisdictions drawn up and/or assessed in a coordinated manner. Please contact us for more information.
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