Documentation

Documenting transfer prices is an integral part of most tax laws domestically or abroad. Companies have the duty to document and to give evidence of their transfer prices in order to ensure that their international transactions and business relationships are conducted on a fair and reasonable basis.

The complexity of transfer pricing has further increased by the ongoing far-reaching regulations of other countries and the OECD. Such regulations have the objective to ensure that transfer prices set between affiliated companies are based on an arm’s length principle and that profits are not artificially shifted to other countries or manipulated in order to avoid paying taxes.

Nexia supports companies worldwide in reviewing and in preparing globally harmonised and coordinated transfer pricing documentation. Our experts have comprehensive knowledge of national and international tax laws and regulations and can ensure that your transfer prices correspond to the legal requirements.

It is not sufficient to only consider the regulations in any one country. Owing to information being exchanged between countries, the transfer prices applied must comply with local laws abroad, be reviewed, agreed upon and properly documented. This is decisive for avoiding any potential inconsistencies on any points relevant to tax in the different sets of documentation and for ensuring that your transfer prices correspond to any changes in tax law or in local requirements. Should this not be the case or if any inconsistencies in transfer prices are identified, they may be detected during an audit. Such an event may lead to double taxation and have considerable financial effects on your company.

The experts in our network can support you in preparing the Master Files, Local Files und Country-by-Country Reports required. We also offer function and risk analyses, value-added chain analyses and reviews on the appropriateness of your transfer prices. Our benchmark analyses serve as evidence of a third-party comparison. Already in the first phase of the transfer pricing process we do a “health check” of your transfer pricing landscape in order to identify any issues that could come up during an audit and to avoid them.

Our services in the area of transfer pricing:

• Supporting/preparing global transfer pricing documentation that fulfils national and international legal requirements of a
  • Master File
  • Local File
  • Country-by-Country Report
• User documentation
• Function and risk analysis
• Analysis of the chain of added value
• Determining potentially appropriate transfer prices (at arm’s length)
• Benchmark analyses

Publications on transfer pricing can be found here.