Transfer pricing
The transfer pricing landscape is complex and constantly evolving in the UK and internationally. As companies pursue opportunities in competitive and growth markets, tax authorities demand transfer pricing compliance on the intercompany pricing of goods, services, intellectual property and financing arrangements.
Transfer pricing issues can arise across many tax-related business processes and commercial activity. Annual statutory audit and tax reporting may be impacted if the business cannot demonstrate compliance with transfer pricing rules. Investors will expect tax transparency on capital funding, business disposal, and regulators too for public listing.
Our experienced transfer pricing team can help your business develop, implement, document and defend, if necessary, your transfer pricing arrangements in the UK and globally. Having worked with leading companies across diverse industries and markets worldwide, we provide specialist transfer pricing advice and support in the following areas:
Transfer pricing planning
As businesses expand or change, their transfer pricing policies should continue to align with their operating model and commercial activity. We work with companies to design transfer pricing policies which align profit recognition with value contribution. We understand the different transfer pricing needs of companies at every stage in the business lifecycle.
We have expertise in assessing the range of commercial and tax considerations which inform global and domestic transfer pricing planning, including the group value chain, IP management, business processes, organisational roles, transactional and industry models, and the interaction with direct and indirect taxes in different jurisdictions. We develop commercially driven transfer pricing strategies which align with the key drivers of business profits.
Transfer pricing risk review
Companies need to ensure that their transfer pricing policies are contemporaneous and do not become outdated or develop gaps, especially when laws and regulations change or business developments overtake prior tax positions.
We work with companies to perform diagnostic health checks to identify inappropriate transfer pricing policies, inadequate documentation or improper implementation. We identify potential issues and provide a roadmap to mitigating the risks and demonstrating compliance.
Transfer pricing documentation
Transfer pricing documentation provides increased transparency to, and so greater potential for, scrutiny by tax authorities. Not only is its preparation a compliance requirement in many countries, but it also represents the first line of tax audit defence.
We are experts in preparing robust documentation to support the arm’s length nature of related party transactions of individual entities or those across the group, including Master Files, Local Files, Country-by-Country Reporting, and similar tax disclosures. Our documentation is centrally managed to align with group policies and generate efficiencies, and customised for local country requirements.
Transfer pricing implementation
The proper execution of transfer pricing policies is essential for risk management. Alongside tax, corporate functions such as finance, IT, legal, and trade and customs often need controls and processes which set, monitor and adjust the pricing of intercompany transactions.
We work with companies to design, review and remediate the implementation of their transfer pricing policies. We help companies to optimise the governance and operational risk framework, align cross-functional processes and manage transfer pricing adjustments with tax and customs authorities.
Transfer pricing dispute management and resolution
Transfer pricing audits and disputes with tax authorities are increasing in volume, geography and complexity. Companies need to take a proactive approach to ongoing compliance and manage exchanges with tax authorities during a tax audit.
We work with companies to defend against additional tax assessments as a result of administrative or legal challenges to their transfer pricing policies. We provide guidance throughout the negotiation process with a tax authority, whether a domestic dispute or with an overseas tax authority through the Mutual Agreement Procedure. We have experience of negotiating agreements with tax authorities through unilateral and bilateral Advance Pricing Agreements.
Our transfer pricing services and team
Our experienced transfer pricing team can provide practical and tailored solutions to your business across the full suite of transfer pricing services. We work with local experts across PKF Global, our international network of professional advisory firms.
We can help your business navigate the local and international transfer pricing landscape, reduce risk and capitalise on market opportunity.