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Transfer pricing is the process by which related parties set the prices at which they pass goods, services, finance and intangible assets between each other.
Given the scope of manipulation of transfer prices between related parties, and its potential effect on reported profits arising in different jurisdictions, it has become of increasing interest to tax authorities.
How does it affect you?
Generally speaking, transfer pricing affects your company if it is under the control of another party or has control of another party, or if both parties are under common control.
All transfers between related parties must be carried out at “arm’s length”. This means that the prices paid for goods or services are the same as if the parties were not related.
Taxpayers are now required by law to compute their own liability and this puts the onus of proof in justifying related party transactions from the Inland Revenue to the taxpayer.
How can Grant Thornton help?
We can help your business in the following areas:
- Documentation – to meet local and foreign documentation requirements
- Planning studies – to develop a new transfer pricing policy or tax effective supply chain
- Audit defense – we can help you to defend your transfer pricing policies with the tax authorities
- Cost Sharing Arrangements - we can help you to devise and implement a cost sharing arrangement to rationalise your intra-group charges.
Manage your worldwide tax charge (please click on the following link to view other international corporate tax planning services that will help in this area)
We also offer a number of other transfer pricing services -please contact us so that we can help to develop a transfer pricing solution tailored to meet the needs of your business.
Transfer Pricing Resources
We work closely with our transfer pricing colleagues in other countries so that we can offer our clients a global solution to their transfer pricing issues.
Contact us about Transfer Pricing
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