Transfer Pricing

Our WTS experts assist in the development and implementation of documentation across the group. This is done in compliance with current legal requirements and international standards (for example OECD Transfer Pricing Guidelines). Due to the innovations in the BEPS context, a tripartite documentation approach will now be required: The presentation in a master file (master documentation), in a local file (company-related documentation) and country-by-country reporting.

Three-tiered approach to transfer pricing documentation

 

OECD approach
Master File	Local File	CbC Report
Comprehensive overview of business operations of MNE Description of the organizational structure and the value chain	Detailed information about transactions of local entity Function and risk analysis	Financial information (e.g. revenues, profits and tax) for each country Information regarding the functional profile of each entity
wts TPmanager		wts CbCRmanager
		wts CbCR-2-XML

An essential tool for proving the arm’s length of intercompany transactions are benchmarking Studies. By now, the process was characterized by high expenditure of time and money as well as subjective decisions. Using an AI, we are able to improve the quality of benchmark studies through more consistent decision-making and make the benchmarking process more efficient.

The artificial intelligence supports the screening process by calculating probabilities for various functions. Thus, a part of the companies can already be excluded automatically; the remaining companies can be processed manually considering the assessment of the AI. A machine learning method, which has been trained based on manually conducted benchmarking studies, calculates the probabilities. For this purpose, the website texts of potential comparable companies are crawled, translated into English, and based on a relative frequency of words, the calculation of probabilities can be performed.

Due to the standardized decision-making by artificial intelligence, we can make more consistent decisions and offer you even higher quality benchmarking studies without negatively impacting the consulting costs. The efficiency gain in our process allows us to increase the number of screened entities.

We would be glad to explain the functionality of artificial intelligence during a live demonstration and answer your questions on this topic.

We help our clients to design and implement internal transfer pricing guidelines. We offer individual and efficient solutions for all company-specific particularities. That way a multionational corporation can raise awareness of the issue of transfer pricing across all levels of the company. At the same time this also makes it possible to identify and avoid any risks at an early stage. In the time of growing mobility of personnel and the ongoing digitalization of working processes this becomes more and more important.

In addition to preparing transfer price documentation reports and guidelines, we also support our clients in the overall planning and optimisation regarding all aspects of their global transfer pricing system. As a result of the BEPS developments it is clear that the calculation of transfer prices and the profit allocation within the group must match the added value contributed by each of the group’s companies. We offer many years of experience and comprehensive specialized expertise in various industries when it comes to performing the necessary economic analyses. We use leeway in terms of design to advise corporate and value chain structures that are optimal from a transfer pricing perspective. Our expertise lies in particular in establishing principal structures, centralising services and redesigning sales models and R&D structures.

In the course of a restructuring regarding the organisational or group structure, we support our clients with the analysis and optimisation of the restructuring form a transfer pricing perspective, as well as with the preparation of the necessary documentation. Even for cross-border business restructurings in the context of the regulations regarding the shift of functions and — related to this, and often necessary — the complex valuation of intangible assets, we offer comprehensive advice from our global network of transfer pricing experts.

Intangible assets are now frequently key value drivers for corporate success and therefore often have a high economic value. They are always the focus of tax audits around the world. It is therefore of vital significance for international companies to plan, implement and consistently document the global development of IP within a multinational group. This may take place, for example, as part of the internal research and development programmes or by analysing matters from a transfer pricing perspective. Besides, the valuation of IP is frequently the starting point for the determination ofg internal arm's length licence fees that apply to the use of IP within a multinational group of companies.

In recent years, transfer pricing of intra-group financing structures has become the focus of tax administration and jurisdiction.

Due to imprecise and non-binding regulations at the national and international level, this area of transfer pricing bears an increasing potential for uncertainty and risk for taxpayers. We advise our clients comprehensively on the holistic planning and documentation of transfer prices in the field of cross border intra-group financial services in order to effectively reduce the associated risks. In addition, we support our clients in particular by performing quantitative analyses in order to determine arm's length financing conditions, e.g. in the form of specific ratings of group companies, interest rate benchmarks and fee split analyses. Through access to the WTS Global network, international financing structures can also be evaluated multilaterally.

More information about our Financial & Treasury Services: Link

Tax authorities increasingly focus on transfer pricing. We support our clients both in avoiding disputes and in defending transfer prices in tax audits as well as in any legal disputes and dispute resolution proceedings that may result. In doing so, we draw on our comprehensive expertise in court proceedings as well as in out-of-court measures.

Dispute avoidance

• Planning and conducting Advance Pricing Agreements (APAs)
• Support in coordinated international tax audits (i.a. Joint Audits and simultaneous audits)
• Advice on the International Compliance Assurance Program (ICAP)

Dispute resolution

• Preparation of tax audits, advice on tax audit strategy and comprehensive accompaniment during tax audits
• Preparation and implementation of opposition proceedings and court proceedings
• Preparation and implementation of cross-border mutual agreement procedures (MAP) and arbitration proceedings

We provide timely and expert support in clarifying possible consequences abroad with the foreign transfer pricing experts in our worldwide WTS Global network and initiate the necessary steps in good time. We also make use of the relationships of the foreign transfer pricing experts from the WTS Global network to the local tax authorities.