Transfer pricing
Transfer pricing is receiving increased attention and in recent years has become one of the most important themes in international tax law. It isn’t just a question for large multinationals, many SMEs and family entrepreneurs operating both within and outside our borders are also becoming increasingly aware of the importance of this issue.
“VGD's advisors will be happy to help you to clarify the complexities of transfer pricing.”
Transfer pricing explained
The Arm's Length Principle
Transfer pricing is based on the Arm’s Length Principle (ALP), meaning that all transactions between related parties must be carried out as if they were independent and therefore unrelated to each other. It is therefore appropriate to carry out benchmarking (comparative analysis) to ensure that your pricing reflects market conditions, taking account of the functions performed, risks borne and assets used by the separate parties.
Principle of territoriality
States and mainly tax administrations are paying more and more attention to maintaining and controlling market conditions for transactions between related parties since transfer pricing was introduced. More attention is definitely being paid to this in an international context, as incorrect pricing potentially means a loss of revenue for the tax administration.
Let's talk transfer pricing!
“VGD’s specialists would be happy to sit around the table with you to help you to understand this complex area and optimise your company’s handling of it.”
- Quick-scan: identifying relevant points of attention and risks of your company and checking whether your company complies with (inter)national regulations and legislation.
- Assistance with transfer pricing documentation
- Guidance and advice on planning and compliance
- Practical implementation of your transfer pricing policy, both in Slovakia and internationally.
- Preparation of benchmark studies ex ante/ex post (including all kinds of intellectual properties and financial transactions)
- Representation of clients in tax litigations related to transfer pricing
The Arm's Length Principle
Transfer pricing is based on the Arm’s Length Principle (ALP), meaning that all transactions between related parties must be carried out as if they were independent and therefore unrelated to each other. It is therefore appropriate to carry out benchmarking (comparative analysis) to ensure that your pricing reflects market conditions, taking account of the functions performed, risks borne and assets used by the separate parties.
Principle of territoriality
States and mainly tax administrations are paying more and more attention to maintaining and controlling market conditions for transactions between related parties since transfer pricing was introduced. More attention is definitely being paid to this in an international context, as incorrect pricing potentially means a loss of revenue for the tax administration.
Let's talk transfer pricing!
“VGD’s specialists would be happy to sit around the table with you to help you to understand this complex area and optimise your company’s handling of it.”
-
Quick-scan: identifying relevant points of attention and risks of your company and checking whether your company complies with (inter)national regulations and legislation.
-
Assistance with transfer pricing documentation
-
Guidance and advice on planning and compliance
-
Practical implementation of your transfer pricing policy, both in Slovakia and internationally.
-
Preparation of benchmark studies ex ante/ex post (including all kinds of intellectual properties and financial transactions)
-
Representation of clients in tax litigations related to transfer pricing
Further questions regarding transfer pricing? You can always contact our advisors!
