Transfer pricing

All businesses which trade internationally and have cross-border transactions between group companies are likely to face Transfer Pricing issues. These issues include enquiries from the tax authorities in one or several jurisdictions. Many jurisdictions now have transfer pricing legislation in place. This legislation include compliance rules. To be compliant, businesses must document their transfer pricing policy correctly. 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: support in preparing and updating your required Transfer Pricing documentation, optimising your business model for tax purposes, guidance in concluding Advance Pricing Agreements, support in discussions with the Dutch tax administration

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Discover more about Transfer pricing

Transfer Pricing and compliance obligations

With respect to your Transfer Pricing compliance obligations, various issues can be recognised, e.g. which formal requirements apply to your specific situation, how you should deal with IP and, more specifically, hard-to-value IP. However, once the formal compliance requirements are met, this does not guarantee a smooth discussion with tax authorities in all jurisdictions involved. To obtain certainty on your tax positions, an Advanced Pricing Agreement may be preferable Furthermore, as tax authorities may disagree on positions you have adopted even with your Transfer Pricing documentation in place, you could still incur double taxation requiring correction through a Mutual Agreement Procedure. All the above items are discussed in detail below.

Financial Transfer Pricing

Within multinational enterprises, financial transactions are key to obtaining funding across the group, service liquidity provision, long-term funding and other operational and tax needs. Often, these transactions are the most extensive and material within such enterprises. In conjunction with revisions made to the OECD Guidelines on this topic, financial transactions have become more prominent on the transfer pricing agenda. There has also been a significant shift in the way in which tax authorities have sought to analyse and challenge intercompany loans and other support measures and treasury operations from a transfer pricing perspective.

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Restructuring and Transfer Pricing implications

As an entrepreneur, you are always on the hunt for additional business opportunities and/or ways to structure your business more (cost and/or time) efficiently. However, your economic decisions may have (significant) tax implications as well. This is even more important if your decisions have a cross-border impact, since then several tax authorities may have reason to challenge your position.