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Transfer Pricing Rules
Transfer Pricing Rules
Ensuring compliance, reducing risk, and protecting your bottom line
Understanding transfer pricing rules is the first step to preventing costly tax adjustments. These rules govern how related entities set prices for cross‑border transactions—sales of goods, services, financing, or intangibles. Their purpose is to ensure intercompany prices reflect the “arm’s‑length principle”: the price unrelated parties would agree under similar circumstances.
Why it matters: Mispricing can lead to profit shifting, double taxation, hefty penalties, and reputational damage.
Since we are 100% focused on our passion for Transfer Pricing, Quantera Global is here to give you a clear answer, no matter how complex your question. Continue reading about transfer pricing rules, or schedule a transfer pricing scan.
Theo Elshof
Managing Director
Want to know more about Transfer Pricing Rules?
Get in touchSetting the rules: the Arm’s‑Length Principle & OECD Guidelines
Central to transfer pricing rules is the arm’s‑length principle. The OECD Guidelines provide the accepted framework to apply this principle consistently across jurisdictions. Key transfer pricing methods include:
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Comparable Uncontrolled Price (CUP): Matching with prices in comparable uncontrolled transactions
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Cost‑Plus: Adding an appropriate markup to costs incurred
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Transactional Net Margin (TNMM): Ensuring net margins align with those of comparables
These methods translate the abstract rules into practical tests for your intercompany pricing. Quantera Global helps to decide on the best transfer pricing strategy and offers a transfer pricing analysis that shows opportunities and threats.
Webinar: Transfer pricing aspects of financial transactions
Country‑Specific Requirements (rules)
While OECD sets baseline rules, local jurisdictions adapt them with specific documentation thresholds, penalties, and safe harbors. Understanding these local variations is essential to applying global transfer pricing rules correctly.
Knowing these jurisdictional rules helps you avoid unexpected audits.
Quantera Global is formed by a diverse team of colleagues operating out of offices around the world including those of our alliance partners. This ensures that we are a one-stop-shop for multinationals in the field of transfer pricing.
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Documentation & Reporting
Robust documentation is a core requirement of transfer pricing rules and your best defense in an audit. To demonstrate compliance, companies must prepare:
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Master File: Overview of group‑wide policies, intangibles, and financing arrangements
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Local File: Detailed breakdown of local entity’s related‑party transactions
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Country-by-Country reporting: High‑level allocation of income, taxes paid, and indicators of economic activity across jurisdictions
Timely, accurate reports not only satisfy regulators but also support internal governance and investor confidence.
White paper: Transfer Pricing for Multinational Enterprises
Want to have an in-depth document with actionable steps on how to improve transfer pricing? Download our whitepaper about Transfer Pricing for MNE’s by Quantera Global!
Advanced Rulings & Agreements
When standard rules leave uncertainty, rulings provide clarity and binding certainty. Advanced agreements with tax authorities can lock in your transfer pricing rules for future years:
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Advance Pricing Agreements (APAs): Unilateral, bilateral (BAPA), or multilateral (MAPA) agreements on pricing methods for 3–5 years
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Mutual Agreement Procedures (MAP): Post‑audit dispute resolution to prevent or eliminate double taxation
Securing an APA or MAP ensures your pricing approach aligns with the rules and avoids future challenges.
Learn more:
Common Audit Triggers & Compliance Risks
Tax authorities enforce transfer pricing rules by identifying anomalies that suggest non‑arm’s‑length practices. Proactively addressing these risk areas ensures your rules-based pricing stands up to scrutiny.
Our greatest success is your success.
"Quantera Global is the specialist in transfer pricing reporting. They provide us with the extra knowledge to produce the master and local files. Communication is clear and direct."
Piet van Eekelen
Group controller at B.A. Geurts-Janssen B.V.
"Quantera Global has excellent knowledge of transfer pricing and understands the customer's situation. Questions are carefully considered, so that a response is given as concretely as possible and in understandable language for the client."
Ton Rouwette
Controller at Fischer Benelux B.V.
Learn more about Transfer Pricing Rules
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