Transfer Pricing refers to the allocation of profits between related entities. Transfer pricing relates to numerous types of transactions including; performance of services between parties, loans between parties, sales of tangible property between parties, transfers of Intangible property between parties and lease of real or tangible personal property between parties.
During recent years, transfer pricing has gained increasing attention from tax authorities all around the world. Countries have passed or introduced legislation with detail requirements for taxpayers to justify and more importantly, document that their intercompany pricing is at arm’s length. This mitigates the ability of companies to shift income from high-tax jurisdictions to low-tax jurisdictions.
At the recent G-20 conference last fall in Europe, Transfer Pricing was a visible topic. As a result of the conference, the nations that were present all agreed that the documentation to support the Transfer Pricing between inter-company parties will be more scrutinized by local taxing authorities thus creating a greater burden on companies to provide even more documentation.
Transfer pricing and the tax issues surrounding them are some of the most complex issues facing multinational companies today. At Prager Metis we have an expertise in transfer pricing and can utilize our knowledge as an opportunity to optimize profits, increase cash flows and moderate taxes while satisfying local authorities requirements.
Prager Metis’ team will work with you to develop transfer pricing policies that are defensible, flexible and in-line with your company’s overall strategic tax plan and goals, so that you can focus on other operational business objectives.