Transfer Pricing Strategy
Transfer Pricing Strategy
A good strategy is the foundation of a company. The transfer pricing strategy is an essential aspect of any multinational enterprise strategy. It ensures that your intercompany transactions are aligned with your business model, compliant with global regulations, and defensible under scrutiny.
Things to keep in mind when determining your transfer pricing strategy:
- How your business strategy impacts your transfer pricing policy — and vice versa
- What insights can be gained from past or ongoing transfer pricing projects to guide strategic decisions
- How to use this moment to mitigate tax risks and identify opportunities for improvement
- Which transfer pricing regulations apply in the countries you operate in, and how to stay compliant across jurisdictions
Quantera Global can help your company in defining and updating your transfer pricing strategy. Our advisors are available for advice and assistance.
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"Quantera Global is great to collaborate with, a trustworthy partner from strategy up to defense, that fully understands the complex nature of Transfer Pricing while strategically reducing risk."
Director Tax EMEA at Celanese
“Quantera Global has proven to build up a trustworthy partnership with our team. They were able to translate our complex supply chain to a logical Transfer Pricing Strategy supported by readable TP documentation.”
Corporate Director Tax at Marel
Strategies
There are many aspects of transfer pricing strategies. Here are just a few examples:
Transfer pricing strategy: compliance
Transfer pricing compliance is about meeting all guidelines and regulations, both national and international.
Defining a transfer pricing compliance strategy is a process that takes time and costs effort. Determining a compliance strategy is important because of multiple factors. For example, it may not be feasible to pursue the highest level of compliance due to limited resources. You may have to make choices, so it is important to determine your optimal level of compliance. The level of compliance that suits your company will largely depend on the company’s risk strategy.
Other things to consider are the various options for preparing transfer pricing documentation. The final factor in the process that is important is to create a priority list and timeline that includes deadlines and budget required.
Determine the compliance strategy via this 4-step process:
- Determine your overall tax risk strategy
- Determine the level of compliance you wish to achieve: distinguish between formal compliance and material compliance
- Determine which type of documentation process suits your company
- Draw up a priority list and obtain buy-in from stakeholders
Need support with your transfer pricing strategy? Our advisors are happy to help. After our support, your will have a proper strategy, based on the risks and opportunities for your company.
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Transfer pricing strategy: controversy
Transfer pricing controversy is not only the handling of disputes that have emerged, but also communication with tax authorities, effective handling of tax audits and possible risks and considerations for the transfer pricing policy applied. The increase in transfer pricing regulations and their growing complexity leads to an increase in transfer pricing controversies. Therefore, it is important to have a controversy strategy and to be prepared for different scenarios.
The importance of a controversy strategy
It is not possible to completely prevent transfer pricing controversy, but a proactive stance is recommended. Tax authorities will however form their own opinion on the facts and circumstances. The primary approach to tackle controversy is to start with a proactive controversy strategy. Especially for large companies, such as multinationals, it is important to have a clear and consistent strategy. The strategy includes the approach in different jurisdictions and global management of transfer pricing audits.
To ensure your company’s time and budget is spent where it adds the most value, we help you define a transfer pricing strategy that best supports your company and your risk appetite. Together, we can determine which strategy best suits your company. Prevention is better than cure.
Transfer pricing controversy is not only the handling of disputes that have emerged, but also communication with tax authorities, effective handling of tax audits and possible risks and considerations for the transfer pricing policy applied. The increase in transfer pricing regulations and their growing complexity leads to an increase in transfer pricing controversies. Therefore, it is important to have a controversy strategy and to be prepared for different scenarios.
The importance of a controversy strategy
It is not possible to completely prevent transfer pricing controversy, but a proactive stance is recommended. Tax authorities will however form their own opinion on the facts and circumstances. The primary approach to tackle controversy is to start with a proactive controversy strategy. Especially for large companies, such as multinationals, it is important to have a clear and consistent strategy. The strategy includes the approach in different jurisdictions and global management of transfer pricing audits.
To ensure your company’s time and budget is spent where it adds the most value, we help you define a transfer pricing strategy that best supports your company and your risk appetite. Together, we can determine which strategy best suits your company. Prevention is better than cure.
How can Quantera Global assist?
When you are defining or updating your transfer pricing strategy, we can provide support in this process. With the help of our transfer pricing analysis and our experience with all kinds of strategies (from both small family business as well as large MNEs in various industries), we can provide you with valuable insights.
For example: how to allocate responsibilities and set Key Performance Indicators (KPIs).
If you would like to discuss how we can be of service to you, please make an appointment for a free consultation by phone or fill in our contact form. We are looking forward to meeting you.